Preamble

The House met at half-past Two o'clock

PRAYERS

[Mr. SPEAKER in the Chair]

EXPERIMENTS ON LIVING ANIMALS

Address for Return,
of Experiments performed under the Act 39 and 40 Vict. c. 77, during 1964."—[Mr. George Thomas.]

Oral Answers to Questions — MINISTRY OF AVIATION

Sub-orbital Airliner

Mr. Derek Page: asked the Minister of Aviation whether he will initiate feasibility studies regarding a sub-orbital airliner.

The Minister of Aviation (Mr. Roy Jenkins): In the present state of our knowledge it would be premature to embark on feasibility studies of a sub-orbital airliner but limited research into the problems of hypersonic flight is proceeding.

Mr. Page: Will my right hon. Friend bear in mind that this is the ultimate airliner in any further projects following on the Concord, and does not he agree that it is as well to bear in mind the implications regarding the aerospace launcher along the lines suggested by the British Interplanetary Society?

Mr. Jenkins: I shall bear this implication in mind, but I want to make progress, as I hope we shall, with the Concord before we devote too many energies to looking too far ahead.

Emigrants (Reduced Fares)

Mr. Kenneth Lewis: asked the Minister of Aviation what has been the cost to the national airlines over the past year of reduced fares for emigrants.

The Parliamentary Secretary to the Ministry of Aviation (Mr. John Stonehouse): I do not agree that emigrant fares involve a cost to British Overseas Airways Corporation. But for these reduced fares the bulk of these emigrants would not have gone by air. British Overseas Airways Corporation consider this traffic constitutes a worthwhile source of additional revenue.

Mr. Lewis: Can the hon. Gentleman say why this has been stopped from the end of July? Are the Government worried that there might be such a rush to get out of the country owing to the present Administration that they have clamped down on this scheme?

Mr. Stonehouse: No. This is simply a question for B.O.A.C. which considers that it is useful to provide the lower priced tickets for seats that would not be used by those paying full fare. There is no loss involved to B.O.A.C. in continuing this practice.

Aircraft Technicians (Employment Overseas)

Mr. Onslow: asked the Minister of Aviation how many technicians formerly employed in the British aircraft industry are known to have accepted employment overseas in the past nine months.

Mr. Roy Jenkins: Those taking up employment abroad are not required to provide information about their prospective work to a Government Department. I am not therefore able to provide firm figures, but the indications are that the number is small.

Mr. Onslow: Is the right hon. Gentleman aware that the research conducted by the Royal Aeronautical Society suggests that about 30 per cent. of the most highly qualified persons who leave the aviation industry do so in order to emigrate? Would not the right hon. Gentleman accept that this is a matter of public importance and concern, and that a real effort should be made, either on his part or on the part of his colleague the Minister of Labour, to establish what effect cuts in the aircraft industry have had in accelerating the brain drain?

Mr. Jenkins: I agree that it is a matter of importance, but it is of equal importance not to see this issue out of perspective, as there has been some tendency to


do. Our information is that the recent cuts may have led to five technicians emigrating from Preston, eight from Weybridge, and four from the Hawker Siddeley Group.

Stansted Airport (Aircraft Noise)

Mr. Newens: asked the Minister of Aviation if he will make a statement on the extent to which Harlow will be affected by aircraft noise if the proposals to build a third London airport at Stansted are proceeded with.

Mr. Stonehouse: My Department has undertaken to give the local authorities concerned—well in advance of the public inquiry—the best available information about the likely noise caused by Stansted in the event of its development as the third London Airport. As this information is still being prepared I am not yet able to say to what extent Harlow will be affected.

Mr. Newens: Is my hon. Friend aware that a large and increasing population, particularly if Harlow Town is expanded, will be subjected to the effects of aircraft noise if the proposal to create London's third airport is proceeded with at Stansted? Will he see that this factor is given ail due weight, along with other factors, in determining the location of this third airport, because a large number of local people think that it is very poor planning to create a problem which has given rise to so much trouble elsewhere?

Mr. Stonehouse: It is too soon to say exactly how this will affect Harlow, but we are extremely well aware of the points which have been raised, and during the inquiry these will certainly be borne in mind.

Mr. Lagden: Is the Minister having consultations with his right hon. Friend the Minister of Transport with regard to the possible traffic bottleneck that may arise in east and central London should Stansted Airport grow to the extent that we all hope it may?

Mr. Stonehouse: Yes, we are in touch with the Ministry of Transport on the question of the co-ordination of transport between the main airports, and certainly if Stansted is developed this will be very much in our minds.

Mr. A. Royle: Can the Minister give an assurance that he will press ahead as quickly as possible in the establishment of Stansted Airport, in order that the pressure of aircraft noise does not all rest on my constituency of Richmond, but is shared by some of the people living elsewhere?

Mr. Stonehouse: We are anxious to develop the third airport—when it is required—in the best place, but I certainly do not wish to anticipate the results of the inquiry which will be held at the end of this year.

Mr. Marten: I was about to ask when the inquiry was to be held.

Mr. Stonehouse: It will be held at the end of this year.

Air Corporations (Computers)

Mr. Eldon Griffiths: asked the Minister of Aviation what types of computer are in use by the nationalised airlines.

Mr. Stonehouse: I refer the hon. Gentleman to the written reply of my right hon. Friend the Minister of Technology to the hon. Member for Devizes (Mr. Charles Morrison) on 7th July which gave details of the computers owned by the Air Corporations and the purposes for which they are used.

Mr. Griffiths: Is the Minister aware that the computer at present employed by B.E.A. is an excellent machine, which is doing valuable service and is capable of great development, but that it now appears that B.O.A.C. is planning to install—at a cost of about £6 million—a computer which, although it may serve the particular functions of B.O.A.C. quite well, is incompatible with that now in existence at B.E.A.? Is not it lamentable for the future of British aviation as a whole that these two nationalised airlines should have computers which will not be able to co-ordinate one with the other?

Mr. Stonehouse: On the first point, I quite agree. B.E.A. has made a very good buy in obtaining a computer which meets its particular needs, but these needs do not necessarily correspond with those of B.O.A.C., and I understand—having gone into this matter with somecare—that the Airimp system of the I.A.T.A. will provide full compatibility between the computers of B.E.A. and


those acquired, or to be acquired by B.O.A.C.

Sir Knox Cunningham: Are these British computers?

Mr. Stonehouse: B.E.A. has bought computers built here, but B.O.A.C. is proposing to buy American computers.

Space Programme

Mr. Marten: asked the Minister of Aviation whether he is satisfied with the progress of Britain's space programme; and if he will make a statement.

Mr. Roy Jenkins: As I informed the hon. Member on 23rd June, a review of United Kingdom interests in space is being undertaken. I hope that this will enable us, by the autumn, to take a more comprehensive view of objectives and possibilities than has hitherto been the case.

Mr. Marten: Does not the Minister agree that by this delay we, as a country, are slipping behind our rivals in this highly technological sphere? Could he give an interim decision as to whether Black Arrow will be fired off? Secondly, when will he get the Bondi Report?

Mr. Jenkins: The Bondi Report will go to my right hon. Friend the Secretary of State for Defence, and not to me. Without notice, I could not say when it is expected. In the meantime, we are proceeding with the preliminary work on the small satellite launcher based on Black Knight—sometimes known as Black Arrow. I do not think that this review is holding up proceedings. We are still participating to the full in E.L.D.O., but it is important in this difficult and challenging field to know exactly where we are going, what we can afford to do, and how we can best hope to get value for money.

Mr. Maude: Is the right hon. Gentleman aware that although everybody would agree that it is of the utmost importance to be quite sure what are the right lines of approach, there is a certain amount of apprehension that, as a country, we are slipping behind, even in comparison with France, at present? Will he give the House an assurance that he will try to expedite the fruitful exploration of this field as quickly as possible?

Mr. Jenkins: Certainly I can give that assurance. I am trying to expedite

it, and I hope that as soon as we come back I shall be able to make a more positive statement to the House.

Mr. Orme: Can my right hon. Friend say what expense is incurred, both preliminary at the moment and proposed in the future, and can he also say what value there is in competing with the United States of America and the Soviet Union in this space race? Have not he and the Government considered trying to get some unified attempt, and thus cut down the wasteful expenditure of all Governments? Surely we have enough problems on earth to solve at the moment without trying to spend money in outer space.

Mr. Jenkins: There is another Question about the expense involved, which I will answer later in precise terms. As for competition with the United States and the Soviet Union, it is our view that we cannot afford to compete on the scale on which they are operating. What we have to decide—and this is the reason why I am considering a review of the position—is what we can do which will keep us in this important technological field and bring some worthwhile economic results without an expenditure disproportionate to our national capacity.

Mr. Hogg: Can the Minister give us any news of the present state of the E.S.R.O. programme, which has a distinct bearing on what has been asked?

Mr. Jenkins: The present state of the E.S.R.O. programme, as the right hon. and learned Gentleman must know, is a matter for my right hon. Friend the Secretary of State for Education and Science.

Manned Space Flight

Mr. Eldon Griffiths: asked the Minister of Aviation what steps he is taking to keep informed of United States and Soviet developments in manned space flight.

Mr. Roy Jenkins: Manned space flight is not a present aim of this country or of any of the international organisations of which we are members, but my Department has access to the published literature emanating from the U.S.A. and U.S.S.R., and frequent reports are provided by our technical missions in the U.S.A.

Mr. Griffiths: Is the Minister aware that there is a large body of technological fall-out from this manned space programme which is benefiting American industry? It has benefited not only industry but medicine, micro-miniaturisation, and many other things. Is he confident that the published material that he says he is getting is made available to scientists in this country and to industries which can benefit from it? Can he further say whether or not he is being apprised by the United States of possible advances being made which are not published but which are equally important?

Mr. Jenkins: I think that we are getting as much information as we could reasonable expect in this field. We cannot hope to have all the advantages without participation, but the cost of participation would be equivalent to the total cost of our defence budget—a point made earlier by my hon. Friend. But we have a good deal of information, and we are doing the best we can to disseminate it to industry.

F111 Aircraft (Avionics System)

Mr. Marten: asked the Minister of Aviation if he will make a statement about the avionics systems to be used in the F111 for the Royal Air Force.

Mr. Roy Jenkins: I have nothing to add to what my right hon. Friend the Secretary of State for Defence told the House on 13th April, 1965.

Mr. Marten: Will the Minister do his utmost, if and when the time comes to buy the F111, to see that the British avionics industry is given the earliest possible notice of what is required of it, so that it can get its bids in at the earliest moment?

Mr. Jenkins: Certainly if this eventuality should arise we will endeavour to see that no lack of prior warning and prior information will in any way tell against the British avionics industry.

Mr. Soames: Will the right hon. Gentleman assure the House that in the Press conference which I understand his right hon. Friend the Minister of Defence is now giving on the defence review in the Ministry of Agriculture—or, rather, the Ministry of Defence—he will not be imparting any information to the Press

on the subject of the F111 which he has not already given to this House?

Mr. Jenkins: I do not think that wherever my right hon. Friend is holding this Press conference there is any danger of his doing that.

Mr. A. Royle: Can the Minister say when we are getting the F111 and also whether the Secretary of State for Defence intends to come here at 3.30 to make a statement to the House on the information that he is now giving to the Press in the conference at the Ministry of Defence?

Mr. Jenkins: As the hon. Member knows, I cannot give the House any decision upon the F111. The decision will depend upon the defence review and, as has always been made clear, it will be taken in the autumn. There is no need for a decision before the autumn. One advantage of this is that we have some months in which to review it without incurring any additional costs.

Mr. Maude: Is the right hon. Gentleman aware that the real difficulty as we see it is that his right hon. Friend the Secretary of State for Defence said that he thought it possible, if not likely, that many of the avionic devices in the TSR2 could be incorporated in the F111? Is it a fact that research in and development of these avionic devices has stopped with the cancellation of the TSR2 and that progress towards providing British avionics for the F111 has therefore ceased?

Mr. Jenkins: No, Sir. There is a possibility of incorporating avionics which were associated with the TSR2 not merely in the F111, if a decision were taken to purchase that plane, but also in the Buccaneer Two-Star, if a decision were taken to go ahead with that plane, and also in the Phantom, where these have more general applications worthy of consideration.

Super-super VC10 Aircraft

Mr. Lipton: asked the Minister of Aviation what approval he has given for orders to be placed with the British Aircraft Corporation for the Super-super VC10 jet airliner.

Mr. Roy Jenkins: I have not so far been asked to approve such orders.

Mr. Lipton: In the light of our balance of payments and the future of British civil aviation, would my right hon. Friend agree that it would be stone crazy to buy Boeings for dollars instead of going all out to get a Super-super VC10 jet off the ground? Time is running out with every month.

Mr. Jenkins: Yes, Sir. This is an important decision for the British aircraft industry and, as my hon. Friend says, for the balance of payments. What we have to consider and what I am trying to consider is whether there is likely to be a substantial market for a stretched VC10. The development costs, both for the airframe and the engine for such a plane, would be very heavy and they would have to be borne to a very large extent by Her Majesty's Government.
In these circumstances, the difficulty is not B.O.A.C.—we all want to see B.O.A.C. equipped with these planes and so, I hope, does B.O.A.C.—but the fact that it clearly does not make sense to incur these very heavy development costs to sell a very limited number of planes to B.O.A.C. My endeavour is to discover what is the best prospective market. If it is good, we shall consider going ahead.

Mr. David Price: Can the right hon. Gentleman assist us by giving us some indication of the total size of the order below which it would be uneconomic to go ahead, on the Minister's argument, with the stretched VC10? Secondly, would he assure us that he is looking at the total cost benefit either way over the whole economy, and not simply limited to the economics of B.O.A.C.?

Mr. Jenkins: Yes, I am. It is a great mistake to regard this issue as turning primarily upon B.O.A.C. It turns primarily upon whether it is a worthwhile investment for Her Majesty's Government of public money. I should not like to say exactly what size of order would be the minimum, but, as the costs of the development of the airframe amount, as I have said before, to several tens of millions of £s—to which has to be added a not very dissimilar sum for the development of the engine if the larger plane is to have adequate range—clearly a reasonable size of market is required to make it an economic proposition.

Mr. Raphael Tuck: Has my right hon. Friend any faith in Sir Giles Guthrie's recent rather half-hearted statement of intention to buy Super-super VC10s? Is he aware of Motion No. 311, standing in my name and the names of about 49 other hon. Members, calling on Her Majesty's Government to support the British Aircraft Corporation to get the Super-super version of the VC10 flying?

Mr. Jenkins: I am aware of that Motion, which I have studied with interest, and I have had conversations with my hon. Friend, but the issue remains not primarily one of B.O.A.C. but one of judgment, as to whether this is a proper investment of public funds.

Mr. Tuck: Sir Giles Guthrie?

Mr. Onslow: The House will be encouraged by what the Minister has said, but could he assure us still further? Could he give us an assurance that he will consider this project on its merits, and that, if it is a question of substantial Government financial backing being necessary, he will not shrink from using his influence to secure that, in spite of the current financial stringencies?

Mr. Jenkins: I will not shrink from using my influence, such as it may be, provided that I am convinced that it is a reasonable proposition.

Mr. Kershaw: Is the Minister aware that I am discouraged by what he said, because he seems to imply that, unless we get fairly substantial export orders for the VC10, there is no hope of going on with it? Is it not, for political reasons, unlikely that we shall have very large export orders for the VC10? Is it not tantamout to saying that he thinks that it will not work and will not be ordered?

Mr. Jenkins: No, Sir. I did not say that I took the view that firm orders would have to be placed. The view which I took, and which I am sure the hon. Member would take if he had responsibility for these matters, is that there should be a reasonable prospect of securing such orders.

Flying Techniques (Films)

Mr. Derek Page: asked the Minister of Aviation whether, in view of the need to promote air safety, he will provide


suitable films on flying techniques for use by private flying clubs.

Mr. Stonehouse: I am assisting the General Aviation Safety Committee to obtain films and other material for use by flying clubs in the interests of promoting air safety.

Mr. Page: I am grateful for that reply. Will my hon. Friend do all in his power to make films more widely available and, in particular, available to the Parliamentary Flying Club?

Mr. Stonehouse: Yes, I will be pleased to arrange for that to be done.

European Launcher Development Organisation

Mr. Wainwright: asked the Minister of Aviation if he will make a statement on the progress that has been made up to date by the European Launcher Development Organisation.

Mr. Roy Jenkins: I would refer my hon. Friend to the Answer I gave on 21st July last to the right hon. Member for Sutton Coldfield (Mr. Geoffrey Lloyd).

Mr. Wainwright: Would my hon. Friend always take into account the fact that this country is apt to get behind in this kind of launcher development? Would he ensure that money is spent to make certain that this country, along with other countries, makes good progress?

Mr. Jenkins: Yes, and I think that, in evaluating what we can do in this respect, it is important to bear in mind that more is likely to be done on a collaborative than on an individual basis, but that does not affect the fact that we still need value for money.

Mr. Eldon Griffiths: Would not the Minister agree that it is of vital importance that the E.L.D.O. organisation should succeed, because unless we are able to provide some form of international launcher device, which will get European satellites into orbit, we shall have to accept—perhaps for all time—that the United States and the Soviet Union will have a monopoly in world telecommunications? It is, therefore, of great importance to the industry and the balance of payments of this country that we should, in some way, create a launching vehicle

which will enable us to have satellite communications.

Mr. Jenkins: I accept a large part of what the hon. Member said. It is not the case that, since this Government came into office, we have been unco-operative in E.L.D.O.

Mr. Wainwright: asked the Minister of Aviation if he will give the total cost, up to the latest available date, of the United Kingdom's contribution to the European Launcher Development Organisation project.

Mr. Roy Jenkins: For the period to 31st December, 1964, our liability for contributions was £15.15 million, of which £13.02 millions were actually paid.

Mr. Wainwright: Is my right hon. Friend quite satisfied that we are spending sufficient money to make rapid progress? Would he confirm that we do not want to pay a very high rental to other countries for telecommunications when we can obtain satellite communications of our own, in conjunction with our European friends?

Mr. Jenkins: In this review, which is proceeding extremely actively at present, I will bear in mind what my hon. Friend has said. I am grateful to him for his expression of opinion.

Mr. David Price: Would the right hon. Gentleman assist the House, when he makes his review, by also giving the House a considerably more detailed written statement—possibly in the form of a blue book or a White Paper—than he could ever give in a statement? He will appreciate that a number of hon. Members on both sides of the House, who are extremely interested in E.L.D.O.—he will always have our support—want to know more details of what is going on.

Mr. Jenkins: I will bear in mind how I can best communicate to the House—which I want to do very fully—the results of this review.

Mr. Mawby: Will the right hon. Gentleman bear in mind, with regard to telecommunications, that we have a stake in a world system and that there is no need to go forward on this purely for telecommunications reasons, as some hon. Gentlemen have suggested?

Mr. Jenkins: I do not think that there is a need purely for telecommunications reasons, although this is one factor to be taken into account, with others.

London Airport Area (Aircraft Height Checks)

Sir H. Lucas-Tooth: asked the Minister of Aviation what height checks on aircraft approaching London Airport have been carried out by or under the instructions of his Department; whether such checks have extended to areas such as Hendon; and whether he will make a statement.

Mr. Roy Jenkins: Aircraft on the last seven miles of their approach to Heathrow are subjected to random checks by precision approach radar. During the last three months less than 0·4 per cent. of the aircraft checked came below the 3 degree glide path.
When more than seven miles from Heathrow pilots are instructed to maintain a height of not less than 2,000 ft. The checks mentioned do not extend as far as Hendon but I am considering instituting wider checks in the near future.

Sir H. Lucas-Tooth: Will the Minister bear in mind that low-flying aircraft cause an intolerable nuisance in areas such as Hendon? Will he pursue his efforts in this direction with the utmost determination?

Mr. Jenkins: Yes, indeed. I will bear this point in mind. I have instituted special discussions during the summer for I, and I think many other Members, have been worried about the degree of noise over central London, and I hope to make sure that the regulations are observed.

Mr. Maxwell-Hyslop: How many aircraft is 0·4 per cent.? The Minister told us that the figure was 0·4 per cent. without telling us the value of 100 per cent. Unless we are told the value of 100 per cent., his information is meaningless.

Mr. Jenkins: I do not think that without notice I could give the total number of movements into London Airport over the period, but 0·4 per cent. is clearly one in 200 of the very substantial number of aircraft approaching London Airport.

Sir Rolf Dudley Williams: Will the Minister look into this matter? For

instance, will he look into the fact that two aeroplanes were flying over Westminster this morning at considerably less than 2,000 ft.? I think that this is becoming quite intolerable.

Mr. Jenkins: I am giving very close attention to this matter. With the expertise of a layman, I have occasionally thought that planes were flying lower than they should have been at the entrance to the glide path. I have had this checked It occurs occasionally but only very infrequently.

B.E.A. and B.O.A.C. (Receipts)

Mr. Shepherd: asked the Minister of Aviation what percentage of the receipts of British European Airways and British Overseas Airways Corporation, respectively, arising from scheduled international passenger services are derived from flights covered by pooling arrangements which virtually eliminate competition.

Mr. Roy Jenkins: In the financial year 1964 to 1965 77 per cent. of the revenue of B.E.A. and 61 per cent. of B.O.A.C. came from routes covered by pooling arrangements. I cannot accept the implication in the Question that such pooling eliminates competition.

Mr. Shepherd: Is not the Minister aware that these figures, together with the fare rigging of I.A.T.A. and the bilateral arrangements, mean that effective competition in air travel has virtually ceased to exist? Does he not realise that until this is broken there is little or no hope of people flying at lower fares?

Mr. Jenkins: No. I do not agree that all competition is reduced. Indeed, within the B.E.A.—Air France pool on the London-Paris route there have been considerable variations in the past few years in the percentage of traffic carried by each carrier. At the same time, I have previously informed the House, and I do so again, that I have some concern about the level of certain rates on high-density European routes, and I hope that we might begin to make progress in a lower direction.

Airline Pilots (Flying Hours)

Mr. Shepherd: asked the Minister of Aviation what were the average actual


flying hours per week for the last available year flown by British airline pilots on scheduled flights.

Mr. Stonehouse: My Department does not have information on the average flying hours a week for British scheduled services, but a sample from the larger airlines suggests that the answer is between 10 and 14 hours.

Mr. Shepherd: Is the Minister aware that the American average—and America has a better safety record than we have—is about 50 per cent. more per week? Is he satisfied that the trade union element among British pilots is not so strong that in fact we are working our pilots fewer hours than we ought to fly them?

Mr. Stonehouse: I do not think that it is fair to make that sort of comparison.

Hon. Members: Why not?

London Airport (Aircraft Movements)

Mr. Kirk: asked the Minister of Aviation what is the maximum number of aircraft movements an hour possible at London Airport under present circumstances; and what are the results of comparisons he has made with other airports of similar size.

Mr. Roy Jenkins: The present capacity of Heathrow airport is a sustained rate of 48 movements per hour. By 1967 we hope to have increased this to 64. Heathrow handles many more aircraft than any other airport in Europe; more are handled at several United States airports, but the conditions at these airports are, for many reasons, not comparable.

Mr. Kirk: Can the Minister say why conditions at United States airports are not comparable? Is he aware that certain experts say that at Kennedy Airport and O'Hare Airport, Chicago, three times as many aircraft movements can be handled as at London Airport?

Mr. Jenkins: There are a number of reasons why conditions are not wholly comparable. One is the weather. Another is the very much higher percentage of the traffic of London Airport than at United States airports, particularly O'Hare, which is international traffic, which leads to certain language difficulties with air traffic communications. At O'Hare only 2 per cent. of the traffic is international.

It is also true that at O'Hare several more parallel runways are in use.

Mr. A. Royle: Will the Minister give the House an assurance that he has no intention of increasing the night movements into London Airport?

Mr. Jenkins: I have no intention of acting in a way which ignores the interests of those who are disturbed by noise around London Airport., about which I am very concerned and about which we have done something practical already.

Mr. Royle: In other words, no.

Mr. Lipton: Is the Minister aware that many people regard London Airport as one of the car parking airports? Is it correct that we are making more money out of the car-park charges than we are out of the aircraft themselves?

Mr. Speaker: Order. I do not think that that arises on this Question.

Mr. Maude: Can the Minister say whether the planned increase from 48 movements an hour to 64 will do more than keep pace with the estimated increase in traffic requirements? Will there, in fact, be an increase which will have any effect on the need or otherwise for a third London airport?

Mr. Jenkins: I fear that this increase will have no such effect. The need for a third London airport remains equally urgent.

Air Traffic Control (Automation)

Mr. Kirk: asked the Minister of Aviation what studies his Department has made on automating air traffic control in the London area.

Mr. Roy Jenkins: The Royal Radar Establishment and the Civil Aviation Operational Research Branch have for some time been studying the application of automation to air traffic control problems including those of the London area. Computers to process flight plans will, from next year, be progressively introduced at the Southern Air Traffic Control Centre and equipment, already in production, for the processing of radar data, will be in use by 1970.

Mr. Kirk: Is the Minister aware that it is good news that at last something is being done about automating London Airport? How fast can he press ahead with


this? Will he say whether the whole of this field will come within the terms of reference of the inquiry which he is proposing to set up into the third London airport?

Mr. Jenkins: I will press ahead as fast as I can. There is another Question down about the hon. Member's second supplementary Question. The inquiry will consider whether Stansted is the right site. It will be able to consider whether an alternative site would be a better site. It will not be able to consider whether there is a need for a third London airport. I hold the view of the previous Administration that this must be a matter for Government decision.

London (Third Airport)

Mr. Boston: asked the Minister of Aviation if he will make a statement about the site for the proposed third airport for London.

Mr. Roy Jenkins: In its Report published in March, 1964, the Interdepartmental Committee on the Third London Airport concluded that Stansted would be the best site. As already announced a public inquiry into the proposal is to be held towards the end of this year.

Mr. Boston: Can the Minister say anything about the report that the Isle of Sheppey has been under consideration as a possible alternative? Will he confirm that in any negotiations the Island Development Committee and other local bodies concerned will be brought in?

Mr. Jenkins: The Island of Sheppey was considered by the Ministry of Aviation, when it conducted its survey into the matter, as a possible alternative site. It has some disadvantages. It conflicts with the Shoeburyness Range, it conflicts with the continued existence of Southend as an airport and it is not a very easy area for access by public transport from London. But it will be quite competent for the inquiry to consider this and other possible alternative sites if they are advocated by people appearing before it.

Mr. Kenneth Lewis: In the meantime can the Minister tell us what steps he proposes to take to try to see that greater use is made of Gatwick, which is inadequately used?

Mr. Jenkins: I am determined in the period between now and the development of the third London airport, whether it is at Stansted or elsewhere, to get a better spread of traffic between Heathrow and Gatwick. I am anxious to do that as far as possible by voluntary means, and the national interest here and the interest of those living around different airports are involved to such an extent that I hope that voluntary means will succeed, but I would not rule out having to take firmer measures.

B.E.A. (Supply of Sweets)

Mr. Raphael Tuck: asked the Minister of Aviation whether he is aware that a number of passengers who formerly used British European Airways have now transferred to other lines because British European Airways no longer supplies sweets on take-off and landing; and if he will issue a general direction in the public interest to British European Airways to resume the supply of these sweets to its passengers.

Mr. Stonehouse: No, Sir. I think that this is a matter which could reasonably be left to the collective judgment of the board of British European Airways.

Mr. Tuck: Is the Minister aware that the sucking of this barley sugar affects the ear health, if one may so call it, of passengers on take-off and landing? Does he think that this penny-pinching is worth the resultant loss of passenger traffic?

Mr. Stonehouse: I do not agree that B.E.A. has lost traffic as a result of this. In fact, it has increased in the last eight years by 121 per cent. B.E.A. feels that with the modern aircraft which it uses nowadays there is not so much need for the customers to suck sweets. I feel that my hon. Friend has not scored a bull's eye on this point.

Mr. Shinwell: Is the Minister aware that we are quite willing to forgo the sweets if we can only get a seat when we want one? It appears now that one finds it difficult to get a seat unless one gives notice a long time in advance, and occasionally that makes it awkward.

Mr. Stonehouse: I will certainly bring that to the attention of B.E.A. and I hope that the Corporation will be able


to meet the requirements which are made upon it during this year.

Mr. Boston: Does not the Minister think that as a result of this decision all the suckers are on the other air lines?

Trident II E Aircraft

Lord Balniel: asked the Minister of Aviation what are the reasons for the delay in the order by British European Airways for the Trident II E; and whether he will make a statement.

Mr. Roy Jenkins: The Government have approved a decision by B.E.A. to order 15 more Trident aircraft, bringing its total order for these aircraft up to 39. The further aircraft are to be Trident II Es and are for delivery from 1968 onwards. They will have somewhat greater capacity and range than B.E.A.'s existing Tridents and are particularly suitable for B.E.A.'s longer routes.

Lord Balniel: Is the Minister aware that this will he welcome news indeed to the 6,000 people in Hatfield who work at the Hawker Siddeley works and who are supremely confident that this aircraft will prove as successful as its predecessor? Would the right hon. Gentleman answer two questions? First, is he aware that because of the delay which has taken place so far there is going to be a gap in the production lines between the ending of production of the Trident I and the commencement of production of the Trident II E? Will he accelerate the signing of the contract and so keep this gap as small as possible? Secondly, to what extent are the Government backing this deal financially?

Mr. Jenkins: I am grateful to the noble Lord for his first remarks. I agree that this aircraft has very good export prospects indeed. No undue delay has occurred in proving this aircraft, in view of the importance of the order, and I will endeavour to minimise any gap which may exist to the greatest possible extent, whether by expediting the placing of the full contract or by other measures which it might be possible to take. To answer the noble Lord's question about financial backing, the aircraft will secure from the Government launching aid along the pattern which has become normal in the last

couple of years, but I would rather not go into greater detail on this matter now.

Mr. Maxwell-Hyslop: Is this not about the same configuration of aircraft as the one which de Havilland originally wanted to produce and which B.E.A. originally specified? Is it not the case that Lord Douglas, the Chairman, changed his mind so that the aircraft was produced in a smaller form with no export potential and the whole programme has been delayed? Is it not a fact that now, at long last, we may eventually get the aeroplane which should have been produced and which would have sold abroad had Lord Douglas not sabotaged the whole thing by changing his mind?

Mr. Jenkins: This all goes back a good deal into history, for which I was not responsible. I think that the hon. Gentleman's strictures about Lord Douglas, who ran B.E.A. with signal success for a long period, are uncalled for and unjustified. There are certain important difficulties, but I believe that this aircraft will have a very good future.

London—Rio de Janeiro (Traffic Rights)

Mr. Maxwell-Hyslop: asked the Minister of Aviation why the Brazilian airline VARIG has been granted unrestricted traffic rights into London from Rio de Janeiro, when British United Airways is restricted to one flight per week through Rio de Janeiro.

Mr. Roy Jenkins: I have granted a permit in accordance with the Brazilian rights under the bilateral Air Services Agreement in the expectation that the Brazilian authorities will respond in the same spirit. The British airline on the route, with which I have been in full consultation throughout, agrees with my action. If our expectations of reciprocity are disappointed, I will reconsider the position.

Mr. A. Royle: Is the Minister 100 per cent. satisfied as to the safety record of this airline and would he look at the matter again before British subjects are encouraged to travel from London Airport by this airline?

Mr. Jenkins: I do not think that there is anything which would make it right for me to refuse reciprocal traffic rights


on safety grounds. However, in view of what the hon. Gentleman has said, I will look into the matter again; but I should not like it to be thought that what he said carries the endorsement of the Ministry of Aviation.

Warsaw Convention (Hague Protocol)

Mr. Maxwell-Hyslop: asked the Minister of Aviation what progress is being made in ratifying the Hague Protocol to the Warsaw Convention; what is delaying British accession to the Protocol; and when the new limits of liability of air carriers towards passengers will come into effect.

Mr. Stonehouse: The Hague Protocol is in force between 43 countries. The United Kingdom is not among them because up to now it has been considered that we should denounce the unamended Warsaw Convention before agreeing the Protocol. To do this would have deprived us of the benefits both of the Convention and of the Protocol in our relations with a number of important countries, including the United States of America who, like ourselves, are parties to the Convention but not yet to the Protocol. The position is being re-examined and I hope that, in consequence, it may prove possible for us to endorse this fairly soon. The Protocol and the new limits of liability for which it provides will come into force 90 days following agreement.

Mr. Maxwell-Hyslop: Will the hon. Gentleman please press on with this vigorously? Is he aware that when I tabled an Amendment about this when the Measure was going through—an Amendment designed to increase the limits of liability—it received enthusiastic support from hon. Members on both sides of the House? Is he aware that the present position is quite intolerable, because at the moment the dependants of anybody who is killed in an aeroplane will not get more than £5 14s. a week on the basis of £3,000 compensation? Would the hon. Gentleman please get on with this matter as quickly as possible, because the present position is grossly unjust to the dependants of people who are killed in accidents?

Mr. Stonehouse: We are indeed aware of the importance of this matter. The

Hague Protocol increases the liability from £3,000 to £6,000 and we have endorsed that increase. However, the problem here is that the United States has not yet agreed to this Amendment and we must try to get that country's agreement in view of the importance of our North Atlantic routes and of securing the advantages of the Warsaw Convention, with which at the moment the United States agrees.

Mr. Maxwell: What objection does the United States Administration see to signing this Protocol? Would my hon. Friend say whether we need necessarily wait upon the pleasure of the United States in this matter?

Mr. Stonehouse: I do not want to go into the details concerning the United States objections, but it is a fact that if we go ahead—as we may have to do if the United States continue not to co-operate in this respect—we may lose some of the advantages which we now have in regard to our relations with the United States under the Warsaw Convention.

Mr. Marten: Is the Parliamentary Secretary aware that the reply which he gave to my hon. Friend was precisely the reply which I gave a year ago when I was standing at the Government Dispatch Box? Is he able to say what steps have been taken in the last 12 months to try to persuade the Americans?

Mr. Stonehouse: We are examining the position and hope to make more progress than was made by the last Administration. As the hon. Gentleman will know—indeed, he is well versed on this question—it is extremely important that in signing the Hague Protocol we do not lose the benefits which we have under the Warsaw Convention in respect of our relations with the United States. We want to get the United States with us in this matter and that is why we are against undue haste.

Aircraft Noise

Mr. A. E. Hunter: asked the Minister of Aviation what additional measures he is proposing to take regarding the limits imposed on aircraft noise, particularly near London, Heathrow, Airport.

Mr. Roy Jenkins: In addition to the measures already in force I am considering, with the airlines, the possibility of reducing the permitted day levels of aircraft noise at Heathrow, at the first main built-up area under the take-off path, to 106 PNdb for all jet aircraft except those loaded to an all-up weight of more than 260,000 lb. These latter aircraft will be required, as at present, to conform with the limit of 110 PNdb, and to operate as quietly as is practicable.
I am also proposing to examine, in consultation with operators and manufacturers, whether and, if so, when it might be practicable to apply this day limit of 106 PNdb to all new aircraft coming into service, irrespective of weight. This, of course, raises international implications and with this in mind I am considering inviting interested Governments to a conference in London at which airport authorities, airline operators, manufacturers and scientists could be represented to discuss all aspects of noise in the vicinity of airports.

Mr. Hunter: I thank my right hon. Friend for his efforts and endeavours to assist people living near London Airport. Will he issue a report of the outcome of the international conference which he is arranging with other Governments? Is he aware that many hon. Members on both sides of the House have urged international consultations on the question of aircraft noise and that if he is able to issue a report on this conference it would be of great assistance to all concerned? Might I take this opportunity to wish the conference every success?

Mr. Jenkins: Yes, Sir. The first thing is to get the conference going, and I am hopeful that it will be possible to get it started in the not too distant future, perhaps next spring. It will be a conference not only of Governments but, as I have indicated, aircraft authorities, operators, scientists and manufacturers will be represented. In these circumstances, there would be no question of holding a secret or confidential conference. Its results will, therefore, be made public and I will also consider reporting, to the House after the conference has been concluded.

Mr. Maude: Would the right hon. Gentleman say roughly how his proposed

new limit of 106 compares with the practice in other countries with major airports? Is it to be lower than the generality, or about the average?

Mr. Jenkins: I would not like to give a firm pronouncement on that without notice. It is certainly lower than that in application at many major airports, but one of the problems which we must face in this matter is that London Airport, from the point of view of noise nuisance to citizens, is one of the worst sited major airports in the world.

Mr. Molley: Would my right hon. Friend consider acquainting those local authorities affected with any proposals or propositions he may make ápropos this issue?

Mr. Jenkins: Yes, Sir. We keep in constant touch with the local authorities concerned, through the Consultative Committee, and my hon. Friend the Parliamentary Secretary is in particularly close touch with them.

Sir B. Craddock: Will the Minister say what progress has been made in research into the muffler and such devices to try to cut down noise as well as other nuisances?

Mr. Jenkins: This is precisely one of the questions that we want to discuss at the conference. We are in the position at present in which one can keep the noise down to, I would not say a totally tolerable level, but not a completely intolerable level with regard to lighter aircraft, but for the heavier aircraft we have to continue to run at 110 PNdb. What I am looking for is the possibility that as a result of discussion and forward planning we might be able to reduce that level for all aircraft in the future.

Mr. Dudley Smith: Will the right hon. Gentleman accept that there has been a welcome decrease in aircraft noise over the last two of three years, for which the previous Government and this Government have been responsible, and that we are grateful for it? As there are now suggestions that London Airport is to be increased substantially in size, will he give an undertaking that night flights will not necessarily be increased as well?

Mr. Jenkins: I am aware of the discomfort caused by night flights, and this


is something that we have very closely in mind. It is not so much a question of greatly increasing the size of the airport as of using much more intensively the facilities that are at present broadly available.

Satellite Launchers (Rocket Engines)

Mr. David Price: asked the Minister of Aviation what support his Department is giving to the further development of rocket engines for satellite launchers.

Mr. Roy Jenkins: The United Kingdom, through contracts placed by my Department, is developing engines for the first stage of the E.L.D.O. launcher and is participating in studies for further E.L.D.O. programmes involving the development of more powerful engines using advanced propulsion techniques. We have also placed contracts on national account for preliminary work on engines suitable for a small satellite launcher. All of this is supported as necessary by work in our research establishments.

Mr. Price: I am grateful to the Minister for that reply. Do I take him to mean that most of the work is going on on the successor marks to the Gamma 304 engine? As to the second part of his reply, do I take it that work is taking place on high energy fuels producing better results than the traditional HTP that has been used in the Gamma engine?

Mr. Jenkins: I think that the answer to both of the hon. Gentleman's supplementary questions is "Yes", but as I move, as he will be aware, with a certain caution in these highly technical fields, perhaps I might write to him to confirm that.

B.O.A.C. (Catering and Hotel Enterprises)

Mr. Heffer: asked the Minister of Aviation, in view of the need to develop and expand existing nationalised industries, if he will give a general direction to the British Overseas Airways Corporation, in the public interest, not to enter into arrangements with private catering firms for the creation of joint catering and hotel enterprises.

Mr. Roy Jenkins: I see no need to object in principle to co-operative arrangements between the nationalised Air Corporations and private catering

firms, but I think that all concerned will need to consider such proposals carefully on their individual merits.

Mr. Heffer: Is my right hon. Friend aware that the joint shop stewards committee—[HON. MEMBERS: "Oh."]——of B.O.A.C., which has made representations to a number of people on this issue, is deeply concerned, and takes the view that as this is likely to be a profitable business it could well be conducted by the nationalised industry itself?

Mr. Jenkins: I will, of course, take account of what my hon. Friend says on this matter—[HON. MEMBERS: "Oh."] Certainly, I will, and I am grateful to my hon. Friend for raising the point, which is an important one. If what was involved here were a new proposal equivalent to that of setting up B.O.A.C.-Cunard, I would be most opposed to doing so, but I do not think that one wants to rule out an extension of the business of the airline Corporations into certain catering fields, where the combination of the expertise of a Corporation and of a catering firm might lead to a useful development in that respect.

Mr. Patrick Jenkin: Would not the Minister agree that the time, effort and skill of B.O.A.C. would be much better devoted to running the business of an airline and not to getting involved in other people's business?

Mr. Jenkins: I do not understand whether the hon. Member objects to the proposal or not.

Mr. Maude: Will the right hon. Gentleman assure the House that in his view the consideration here is that the travelling public using the airport should get a proper catering service?

Mr. Jenkins: I am greatly concerned, in all these matters, in looking after the interests of the travelling public as well as with the legitimate interests of the Corporations, in which a great deal of taxpayers' money is invested.

Mr. Tilney: Will the Minister bear in mind that private enterprise risks its own money and usually makes a profit, whereas, so often, public enterprise loses the taxpayers' money?

Mr. Jenkins: Public enterprise sometimes appears to lose taxpayers' money


because of the restrictive conditions under which it was forced to operate by the party opposite.

Mr. Emrys Hughes: Is my right hon. Friend aware that there is a growing feeling among members of the travelling public at Prestwick Airport, and other sections of the public, that they are being exploited by the high charges of the caterers?

Oral Answers to Questions — WIRELESS AND TELEVISION

Fourth Television Channel

Mr. Dudley Smith: asked the Postmaster-General when he will announce the Government's proposals for the allocation of the fourth television channel.

The Postmaster-General (Mr. Anthony Wedgwood Benn): I would refer the hon. Member to the reply I gave to his Question of 15th June.

Mr. Dudley Smith: Would not the Postmaster-General agree that it would provide a welcome stimulus to the B.B.C. and also add competition to commercial television if this channel were handed over to the Independent Television Authority?

Mr. Benn: I am aware of the very great interest there is in the future of this channel but, because of the technical, financial, educational and political considerations, I do not propose to be rushed into a decision on how it should be allocated.

Mr. Frank Allaun: Is it not true that there is remarkably little demand for a fourth channel; and that the public would greatly prefer a real choice of programme on I.T.V. and B.B.C.1, instead of the deliberate coincidence of programmes we get at present?

Mr. Benn: That is a subject on which I think my hon. Friend has a Question later in the Order Paper.

Mr. Gibson-Watt: Will the Postmaster-General give an assurance to the House that if he is to make a statement on the fourth channel, he will make it to the House, and not during the Summer Recess?

Mr. Benn: Yes, Sir. I think that it is clear from what we said earlier that when

the review of broadcasting policy is completed a statement will be made to the House.

Oral Answers to Questions — LEGISLATION

Sir H. Lucas-Tooth: asked the Lord President of the Council what further legislation Her Majesty's Government propose should be completed during the current Session.

The Lord President of the Council (Mr. Herbert Bowden): Her Majesty's Government intend to complete all the legislation they introduced this Session.

Sir H. Lucas-Tooth: Will the Lord President give an undertaking that no new Bills will be introduced before another Queen's Speech?

Mr. Bowden: I cannot give the firm undertaking, but that is probably the position.

Lord Balniel: As we now know that the minimum guaranteed income scheme is not to be introduced this Session, or next Session, or in this Parliament, is it proposed to introduce subsidiary legislation, for instance, to provide the help for non-contributory elderly persons which has been postponed on the promise that a guaranteed income scheme would be introduced?

Mr. Bowden: I am sure that the noble Lord would not expect me to anticipate the next Queen's Speech, or the one after that.

Oral Answers to Questions — AIRCRAFT AND HOVERCRAFT (IN REM JURISDICTION)

Sir Knox Cunningham: asked the Attorney-General whether he has studied the evidence sent to him by the hon. Member for Antrim, South, showing the existence of a demand for jurisdiction in rem to cover aircraft and hovercraft in this country; if he will approach the Belgian Government with a view to the calling of a conference of those nations which took part in the International Conference on Maritime Law held in Brussels in 1952 to discuss international agreement for in rem jurisdiction and the arrest of aircraft and hovercraft; and if he will make a statement.

The Solicitor-General (Sir Dingle Foot): I have studied the letter which the hon. and learned Member sent to my right hon. and learned Friend, but I do not consider that it discloses any substantial demand for a change in the law which would expose airlines to unforeseeable arrests—possibly even for quite small claims. Modern international air traffic observes tight schedules and their disruption would cause great inconvenience in the public. In any event I do not think that the International Conference on Maritime Law would be the appropriate body to consider this question.

Sir Knox Cunningham: Is the hon. and learned Gentleman not aware of the increasing number of small private aircraft which fly to and from the United Kingdom? Should they not also be treated as ships and liable to arrest until bail has been put up to meet a claim? Would not this help in the birth of dynamic legal reform, conceived by the Labour Government nine months ago, whose arrival we all so eagerly await?

The Solicitor-General: I do not think it would be possible to distinguish for this purpose between one class of aircraft or another. As regards dynamic legal reform, that of course is primarily the business of the Law Commission which this Government have brought into existence.

DEFENCE REVIEW

Mr. Soames: On a point of order, Mr. Speaker. In view of the fact that I understand the Secretary of State for Defence is holding a Press conference at this moment to impart to the Press a progress report on the Defence Review, may I ask you whether there has been any request by the Secretary of State to make a statement to the House?

Mr. Speaker: I have received no such request.

Mr. Soames: Further to that point of order. May I seek your guidance? It seems to us a grave discourtesy to the House inasmuch as presumably the right hon. Gentleman has not summoned a Press conference without wishing to impart some information to the Press. We know that he has not imparted it to this House. I wonder whether, therefore, you

could make a request to him to come to the House to impart the information to the House?

Mr. Speaker: That does not give rise to a point of order.

Mr. A. Royle: On a point of order. Is it not a contempt of this House for the Secretary of State for Defence to give a private Press conference in the Ministry of Defence this afternoon and to refuse to let the House know his ideas on the reorganisation of defence?

Mr. Speaker: The point is this. The word "contempt" has a magic and technical meaning. Should the hon. Member wish to make a complaint of breach of privilege, it should be done at another time and I would then consider it on its merits.

Mr. Sydney Silverman: On the presumed point of order which has been raised, is it not a presumed contempt of the House to use alleged points of order to give vent to an obvious political grievance? Is not that a contempt?

Mr. Speaker: I do not think it is a contempt in any sense. I have repeatedly pointed out that it is a form of cheating which is to be deprecated.

Mr. Kershaw: Further to that point of order—

Mr. Speaker: We must have a point of order if there is one, but I do not think there has been one up to now.

Mr. Kershaw: In that case, I shall err no more than anyone else, Mr. Speaker. In view of the business tomorrow, for which debates on the Adjournment have been fixed, would it be in order for the Secretary of State to make a statement on the Adjournment? I understand that those debates are by informal agreement and that he could ask for them to be set aside in order to give what information he has to the House.

Mr. Speaker: The position is that if the Minister asked leave to make a statement he would get it, because I have no power to refuse it. There is nothing else I can do about it.
I give no encouragement about tomorrow, but I take the opportunity of saying that after having worked out a provisional timetable with the greatest


possible care I find that thereafter there will be a Royal Commission containing over 70 Bills and one Church of England Measure imposed upon it.

AGRICULTURE (WHITE PAPERS)

The Minister of Agriculture, Fisheries and Food (Mr. Fred Peart): With your permission, Mr. Speaker, and that of the House, I would like to make a statement about two White Papers the Government have today presented to the House, copies of which are now available in the Vote Office.
The first marks an important step forward in our plans for the development of agriculture over the longer term. It contains our proposals for improving the size, lay-out and equipment of farms, for developing the rural economy in the hills and uplands, and for encouraging co-operation among farmers.
The problem of the small farm has never been comprehensively tackled in this country before, although much has been done abroad. We have far too many farmers trying to win a reasonable living from insufficient land. Many of them cannot hope to earn for themselves and their families an income in keeping with modern standards if they are dependent solely on farming. We want to help these men. It would be neither in their own long-term interests, nor could the nation afford it, if we were merely to try to boost their incomes artificially by higher subsidies. We want to attack at its roots this problem of too little land providing too small a business, giving too poor an income.
We are going to tackle this problem in various ways. First, we shall help the man who can get more land to develop his farm to a satisfactory size and equip it properly. We shall give generous grants for the necessary remodelling works and other costs, and we are exploring ways of helping over credit for land purchase.
Secondly, we shall give financial help to the man who wants to give up an un-commercial holding by selling it either privately or to the State for approved amalgamation. This help will take the form of grants to aid resettlement, or annuities to aid retirement. I should

stress that we aim to let the farmer who retires in this way stay on in his own farmhouse if he so wishes.
Thirdly, we shall give help through a series of grants to those who wish to co-operate together to get some of the advantages of a bigger size business. We are for the first time providing grants to stimulate co-operation in production, for example, of a uniform product to be sold on contract. We propose to set up a Central Council to administer these grants for farming and horticultural co-operation and to provide the necessary purposeful drive.
The small farm presents a particularly acute problem in the hills and uplands where there is also a need to plan the integrated development of agriculture and forestry together with related uses such as recreation and tourism. All past reports on this problem have stressed the need for a body which can promote and co-ordinate such rural development.
We propose to do this by setting up Rural Development Boards, to start with in a few selected areas. The boards, which will include people with local knowledge, will have a variety of powers to help them carry out their programme of rural development. They will work with, and through, the people and the authorities already in the area, including the Regional Economic Planning Councils and boards.
In addition, we propose to reaffirm our belief in the vital agricultural rôle of the hills and uplands as a reservoir for breeding stock by re-enacting the hill cow and hill sheep subsidies on a long-term basis. We also intend to introduce a new scheme of capital grants for land improvements of a kind particularly important in hill and upland farming.
Finally, the Farm Improvement Scheme which has done so much for the modernisation of our farms, particularly by helping the industry to save labour, will be extended on lines similar to the present.
The second White Paper deals with the Meat and Livestock Commission. There is a vital need to improve the marketing arrangements for agricultural produce in this country. One of the most important products, to both the housewife and the farmer, is meat. The White Paper sets out our conclusions,


after discussions with the main organisations concerned, on how the marketing of meat and livestock should be improved.
The improvements required touch all sectors of the industry, and are interrelated. We have concluded that a single body of independent persons, a Meat and Livestock Commission, should be set up to bring them about. Its responsibilities would extend over Great Britain, and the funds for its work would come mainly from levies on animals slaughtered for meat. It would be assisted by a number of advisory committees which would be representative of consumers, producers and the trade.
The functions of the Commission will extend all the way from the farm to the retail shop. On the farm the Commission will be closely concerned with livestock improvement. It will also help the farmer to improve his marketing of fatstock in various ways such as assisting the placing of contracts, and collecting and disseminating market intelligence. The Commission will act for the Government in certifying fatstock for the guarantee, although the Government will remain responsible for its level and the conditions of eligibility.
Next, the Commission will aim to improve slaughtering and wholesale distribution, notably through the introduction of a carcase classification scheme and by giving expert advice to the industry on the efficient construction of slaughterhouses and improved techniques of slaughtering. It will work towards improved presentation in the retail shop and could help to promote the sale of home produced meat. It will also promote and co-ordinate research. Lastly, the Government would look to the Commission for advice on the level of current and prospective supplies at home and abroad.
The Commission may in future find that a further step by way of regulation, reorganisation, or development is needed to serve the interests of the industry and the nation. We therefore propose that it should be empowered, after consulting the interests concerned, to promote schemes for this purpose. Any such scheme would be subject to approval by Parliament.
The need for such a Commission is urgent. We therefore intend that it should

be established as soon as possible and expect it to bring benefit through its work to consumers, producers and the trade alike.

Mr. J. E. B. Hill: On a point of order. I think that I heard the Minister say that the two White Papers were now available in the Vote Office. I have just been to the Vote Office. The White Papers are not now available there. They will not be available until 3.45. Would it not make for the convenience of the House, when a very important statement is being made, for the Press summary to be made available to Members at the same time as it is made available to the Press, namely, at 3.30, which I think I saw happening up in the Press Gallery? It would be a great convenience if we could have it at 3.30.

Mr. Peart: I have carried out the normal practice as I understand it. I am in no way being discourteous. I am anxious that we should have full questions and answers on this Statement.

Several Hon. Members: rose—

Mr. Speaker: I cannot deal with the matter of general practice now. It would merely hold up the House. Also, I should like to refresh my memory about the difficulties of this. I had to look at it once in the last Parliament.

Sir M. Redmayne: In any case, is it not treating the House with scant courtesy—[HON. MEMBERS: "No."] Yes—to produce this complicated statement, supporting two White Papers, which we cannot have seen, on the next to the last day before the House rises for the Summer Recess? I presume that there must be legislation arising from these White Papers. Does the Minister really propose to draft that legislation without consulting the House at all in these matters?
I shall deal with one or two points only, because I know that my hon. Friends will have very many questions to ask, Mr. Speaker. I hope that by your good grace, Sir, they will have the opportunity to ask them. I want to ask specially what is meant by that part of the statement which says that a man who wants to give up his holding can sell it to the State? What is the State to do with the land? For how long will it hold it? Will it then resell it for amalgamation, and, if so, at what


price? Is not this, in fact, the creeping nationalisation of land? The Minister will have great difficulty in explaining how it is not.
Next, the Minister was even more vague about the rural development boards. He simply said that they
will have a variety of powers".
What is meant by "a variety of powers"? Does this include the acquisition of land and possibly by some more stringent means than those which are referred to specifically in the statement?
What is meant by the statement that the functions of the Meat and Livestock Commission
will extend all the way from the farm to the retail shop"?
Are we to assume that trading plays no part in that at any stage?
Lastly, on this matter, although I must admit that I should like to ask many questions, what is meant by the statement that the Commission will be charged with giving
advice on the level of current and prospective supplies at home and abroad"?
How does this relate to the Prime Minister's recent statement that what is required for agriculture is a vigorous import substitution policy? Is there any relation between the two? What are we to read into this phrase in the statement?

Mr. Peart: May I, first, reply to the allegation of discourtesy. I have produced these White Papers. Of course, there will be legislation. Before that legislation is introduced, there will be ample time for hon. Members to examine my proposals, I hope constructively and objectively. After all, there will be several months. Apart from that, all through our discussions on policy and in the preparation of the White Papers we have consulted all the interests concerned. I am anxious to do something. I should have thought that this would have the approval of hon. Members opposite, who did nothing.
The right hon. Gentleman asked me whether the scheme under which a man can give up his holding to the State was not, in fact, creeping nationalisation. This is voluntary. The State will hold the land. Then it will be resold to an individual farmer so there can be larger units. If the right hon. Gentleman thinks

that this is creeping nationalisation, I can only assume that he is living in a world of fancy.
The rural development boards will have powers of pre-emption. We think that this is right and proper. It is not unusual. Many other countries in Western Europe have this. If we are to have a co-ordinated plan for development in certain selected areas, which will affect hill land and upland, I think that this will be the right approach.
The Meat and Livestock Commission will not be a trading authority. It will be there to stimulate production. I have listed its functions in the appropriate White Paper. I hope that hon. Members will read them. The stimulation of contracts, to give only one example, will be of great benefit to producers.
The right hon. Gentleman asked me about the Commission's functions in relation to the giving of advice on imports. Import policy will be the responsibility of the Government. It must be. Any question of the rôle of agriculture in the national plan, its contribution to our own growth and to the saving of the import bill, will be the responsibility of the Government, not of the Commission.

Lady Megan Lloyd George: Is the Minister satisfied that the proposed Meat and Livestock Commission will have the necessary powers to safeguard producers and consumers against exploitation by middle men? What will be the total additional value of the benefits accruing to farmers under the proposals he has announced to the House?
Finally, what special consideration has he given to the problems and needs of Wales?

Mr. Peart: I believe that the Commission will seek to improve marketing. This is its purpose. By doing that, in the end the nation and the consumer will benefit. I hope that when the schemes to improve farm structure get into full operation by 1970 they will be running at approximately £15 million to £17 million, which is a considerable sum of money. For development in the hill and upland areas the peak figure will be in the region of £2 million by 1970. The Farm Improvement Scheme will be running at £12 million a year, which will be at the present rate.
There is also a new advance in co-operation. I am seeking co-operation on the farm itself in the sphere of production. There will be an increase in support, and I estimate that the approximate figure—these figures must be approximate—will be nearly £1½ million by 1970. I repeat that this is an advance. Altogether, the Government will inject considerable sums of money into parts of our agriculture which need it.
I must not forget Wales. Wales has considerable hill and upland and, therefore, the broad approach to the improvement of our hill and upland areas will help Wales considerably. I shall certainly consider the need for a development board in Wales. In the White Paper I have said that if we are to have a board for Wales there will be only one board which can do its work in one area, and then if the development work in that area is completed and we have to move on to another area, the same organisation could do the job.

Mr. Stodart: When the right hon. Gentleman refers to the rural development boards having powers of pre-emption, does this mean that a seller might not then be able to take the highest price from a private bidder because the development board might have the right to take it at a lower price? Is that the object?
May I now ask two questions about Scotland. How many of the rural development boards are intended for Scotland, and will the board that is envisaged for the Highland area co-operate closely with the Highland Development Board?
As to the Meat Commission, will not a Great Britain body be a considerably top-heavy affair? As Scotland is an exporter of quality meat, should there not be a separate commission for Scotland?

Mr. Peart: I think that proliferation would be disadvantageous. I think that a commission covering England, Wales and Scotland is the right approach and that two commissions would be wrong. That is the decision that I have come to and I think that it is the right one.
The question of rural development boards in Scotland is something which we shall have to consider. I have not

made any final decision about this. Obviously, my right hon. Friend the the Secretary of State for Scotland would consult all the interests concerned, including the Highland authority, and consider where we should make a start, but we have nothing specific for Scotland at this stage.
The selling of land will be at the market price.

Sir G. de Frietas: Can my right hon. Friend say how far his proposals for co-operation flow from the Knapp Report, and how far and in what way his proposals affect the position of the Agricultural Central Co-operative Association?

Mr. Peart: My hon. Friend will remember that the Knapp Report was produced by an independent body. Obviously, its findings were carefully considered, but it in no way binds any Minister to make any particular decision. I propose to set up a special council, which will have drive, and we shall still use existing organisations. [Laughter.] I do not know why the hon. Member for Cornwall, North (Mr. Scott-Hopkins) always laughs at references to new proposals.
I should have thought that the stimulation of producer co-operation by the creation of a new council, with new grants and new aids, would be welcomed by the industry. I am certain that bodies like the A.C.C.A. and its Welsh and Scottish equivalents will act as agents for this new body.

Mr. George Y. Mackie: Is the right hon. Gentleman aware that most of the proposals are contained in the Farmer and Stock-breeder of 27th July, which is of considerable help? There are one or two questions that I should like to ask. Is the Minister aware that the industry would welcome a valid scheme to help reconstruction but that it will depend upon the scale? Can he also say where the money will come from for this scheme? I think that he mentioned a sum of £17 million. Will it come out of the general guarantees for farming or is this something on top of it?
Is the right hon. Gentleman aware that the Meat Commission scheme appears to me to be an emasculated Verdon Smith Report without the essential support buying? Without support buying,


the industry is just as apt to get slumps in a period of long-term shortage as it is in a period of short-term shortage. May I ask why this factor has been omitted and what the right hon. Gentleman proposes to do about it?

Mr. Peart: I welcome what has been said by the hon. Member, speaking, I assume, for the Liberal Party. It conflicts with the rather vulgar and naïve statement just made by the Chairman of the Liberal Party Agricultural Committee. I am glad the hon. Gentleman's approach is different.
Of course, valid schemes will have to be examined, but the money which I mentioned will not be included in the guarantees, only co-operation.
On the question of the Meat Commission, I would only say that this commission has certain similarities to and certain differences from that which was proposed by Verdon Smith. I considered the Verdon Smith Report very carefully, but we have, in addition, this very important major reserve power, and I should have thought that this approach would have been welcomed by the hon. Member.
I carefully looked at the whole question of support buying, but this would probably have been too costly. After all, where it has been introduced in other countries—France is an example—farmers have not got the support system that we have in this country. In other words, we have a deficiency payment system. Therefore, expenditure of money on support buying in this country and the building up of stores, etc., would have been extremely costly and would not have been practicable.

Mr. Derek Page: Does my right hon. Friend realise that the proposals that he has announced today are no substitute for an adequate level of support for farm incomes?

Mr. Peart: I accept that. Here we are not dealing with a price review. I am seeking to make the industry much more efficient and viable. I am seeking to improve the position of thousands of small farmers, and to stimulate better meat marketing. The Government have never suggested that these proposals, which are designed particularly to help

many small men struggling to earn a decent living on insufficient land, are a substitute. We are giving the fully commercial farmer an opportunity to earn a proper level of remuneration in accordance with our Agriculture Acts. I never said that the proposals were a substitute, and I reaffirm the fact.

Mr. Kitson: Is the right hon. Gentleman aware that we on this side of the House are appalled at the timing of this statement? Would he state on what criteria these grants and resettlements are to be based? Would he give an assurance that they are not to be based on an acreage payment, because there is a very considerable difference in the price of land in various areas? Will the right hon. Gentleman also tell us what this will cost the Exchequer?

Mr. Peart: I have given an estimated cost. As to the hon. Member's criticism of the timing of the scheme, I think that this is the right way. I only wish the hon. Member had criticised his own Government for failing to introduce something like this.

Mr. Hazell: Is my right hon. Friend aware that his statement will undoubtedly be welcomed by many farmers, since it is clearly the intention and desire of the Government to maintain prosperity in agriculture? Will my right hon. Friend assure the House that in the preparation of the White Papers he consulted the National Farmers' Union, the National Union of Agricultural Workers, and other interested organisations?

Mr. Peart: I have said in the White Papers that all interests were consulted. In the working out of legislation all important organisations involved will be consulted. I have followed this practice, which I believe to be right.

Mr. Kimball: Is the right hon. Gentleman aware that he is unlikely to increase the rate of retirement from farms very much, but that as from today he will have to use the taxpayers' money to pay every small farmer who is thinking of retiring? In the present economic circumstances, is this a very wise scheme? Is the right hon. Gentleman not aware that under the Conservative Government, when there was confidence in the industry and a wholesome market for land, the amalgamation of farms was going


ahead at a far greater rate than most people appreciate?

Mr. Peart: I cannot accept that. It is true that under the Conservative Administration many small farmers went out, but that was a willy-nilly process, often with great hardship, but I am offering incentives. Whether the farmer accepts this is a quite voluntary matter. We think that this is the proper approach.

Mr. Walter Harrison: While thanking my right hon. Friend for that statement and paying him due credit as a Minister of Agriculture, Fisheries and Food, may I ask him directly what benefit the housewife will receive from these proposals?

Mr. Peart: There is the improvement of meat marketing and production and also for the first time in a statutory authority there is a special consumer committee which I am proposing. In the end this will be of great benefit, I believe, to the nation and the housewife.

Mr. Jopling: Will the right hon. Gentleman say in which areas the rural development boards will operate? Will he also estimate how much land they will pre-empt in the future, in what manner they will acquire it and whether it will be done by compulsory purchase? Once they have acquired the land will they let it, sell it or is it intended that they should keep it for all time?

Mr. Peart: I have not made a final decision about the areas. Obviously, we must have careful consultations about this, but I am sure that there are certain areas which are ripe for this sort of development. To give an example of the type of area, without committing myself to my Welsh hon. Friends, there is Mid-Wales. It may be that the rural development board will be the right approach for that area. If I decide that, there will be local consultation and the right of people to make objections to the area being scheduled as a rural development area.

Mr. Harold Walker: Will the responsibilities of the Meat and Livestock Commission extend to the regulation of exports of beef and beef cattle? If not, why not?

Mr. Peart: I know that my hon. Friend is quite rightly concerned about exports.

This matter, however, must be my responsibility, acting for the Government, and I would give the same reply about imports. These must be a Government responsibility and not the responsibility of the statutory Commission.

Mr. Noble: Will the Minister please answer the points put by my hon. Friend the Member for Richmond, Yorks (Mr. Kitson) which he said that he had answered but which I and I do not think anybody else heard? The question was whether the amount to be paid as annuities to farmers is to be on an acreage system. I heard nothing about that in the statement. Another question was about what the amount would be, and I did not hear anything about that in the statement either.
Could the right hon. Gentleman also add two other answers? He talked about an income in keeping with modern standards. This is important, but the figures which I have heard quoted up-to-date cannot be in keening with modern standards. The right hon. Gentleman also said that he made the decision not to have a commission for Scotland. I hope that he meant that he and the Secretary of State for Scotland together made that decision. I regret that decision myself.

Mr. Peart: If there is a decision about Scotland my right hon. Friend the Secretary of State for Scotland will take the initiative and I shall be associated with him, but we have not yet made up our minds, as I have said, whether we shall start a Commission in Scotland.
As for income, I should have thought that the new grants and extensions would have met the right hon. Gentleman's point. I did not intend to mislead the hon. Member for Richmond, Yorks (Mr. Kitson) or the House. The details of the process of amalgamation are on page 4 of the White Paper. I know that hon. Members have not read it yet, but payment will be related to acreage. Up to the age of 55 there will be a grant of £500 plus £15 per acre—[Interruption.] I was asked to give a reply and I am being courteous. Perhaps the right hon. Gentleman will read the White Paper later.

Mr. David Griffiths: We on this side of the House congratulate my right hon. Friend most heartily on a most revolutionary act on behalf of agriculture. Hon.


Members opposite laugh and scorn, but they are only laughing and scorning as far as big farmers and business are concerned. They are not worrying about the small farmer.

Hon. Members: Speech.

Mr. Speaker: Order. Hon. Members cannot make speeches about this matter. There is very great pressure on the time of the House.

Mr. Griffiths: Is it envisaged that my right hon. Friend will give more financial aid to the hill farmers?

Mr. Peart: Yes, Sir. An improved farm structure will benefit considerably many farms in the hill areas. By 1970 aid will have reached £17 million and for specific development of hill and upland areas, I gave a figure of £2 million. The Farm Improvement Scheme will also benefit those areas and we must not forget what I said about producer co-operation.

Sir M. Redmayne: This is a most unsatisfactory situation. The House has many more questions to put to the Minister than you could possibly allow us to ask him, Mr. Speaker. May I have an assurance from the right hon. Gentleman that he will not draft legislation before he has had an opportunity to consult the House?

Mr. Peart: I believe that hon. Members, after they have read carefully the details in the White Paper, will have an ample opportunity to consult those interests who are effected. I will carry out the consultation from the Government's point of view. There will inevitably be arguments and, quite rightly, controversy in the rural community and in all our farming and technical journals. This is a good thing. I hope that hon.

Members will appreciate that before the Bill is presented there will be ample time for discussion and consultation. I am responsible for bringing in the Bill and I shall do it.

Mr. Urwin: Will my right hon. Friend accept a further assurance from me that we warmly applaud the initiative which he has displayed in this matter and that we also welcome the very new ideas enunciated in his statement? May I ask what will be the amount of grant towards amalgamation costs and what exactly it will cover?

Mr. Peart: I gave a global figure which, I said, would reach £17 million by 1970. I intend to bring in a whole series of grants. For example, for farm remodelling the rate of grant will be about 50 per cent. The grants for structural changes and improvements will be 50 per cent.—for demolition 50 per cent.—and for other incidental expenses in amalgamation there will be another grant of 50 per cent. Then I mentioned also the outgoing payments. Here is a series of grants specifically given and I hope that the House will welcome them.

Several Hon. Members: rose—

Mr. Speaker: Order. We must go on.

Mr. Maxwell-Hyslop: On a point of order. As two White Papers have been introduced by the Minister, could not we have more time to put questions to him before we pass on to the next business?

Mr. Speaker: I am sorry. I have to decide these things, which is an extremely difficult task to discharge. We have spent more than 20 minutes on questions on this subject and it would not be fair to the rest of the House and its business to go on in that way.

ELECTRICITY

4.8 p.m.

The Minister of Power (Mr. Frederick Lee): I beg to move,
That this House takes note of the Report and Accounts of the Electricity Council for 1963–64 (H.C. No. 331) and of the Central Electricity Generating Board for 1963–64 (H.C. No. 332).
This is the first major debate that we have been able to have on the electricity supply industry during the course of this Parliament. While, formally, the debate is about the Reports for the year ended 31st March, 1964, which were published nearly a year ago, the Reports for 1964–65 should be available early in October, but at this stage we cannot anticipate their contents. But I hope that, as is customary in debates of this kind, Mr. Speaker, you will allow some latitude both to me and to other hon. Members who will seek to catch your eye so that we may deal with some more recent developments than it was possible for the Reports to cover.
I hope that the terms of the Motion are not controversial, although controversy will probably not be altogether absent from our discussion today. The fact that we are devoting a whole day to the debate shows we are agreed on both sides as to the vital importance of the electricity supply industry to the nation as a whole. It may be a truism to say that electricity is now essential to almost every aspect of modern life, and not only essential in the life of Britain today. All the developments we see for the future depend on the electricity which drives our machines, operates our computers and helps to provide the multitude of complex services upon which an industrial nation like ours relies so heavily.
For much of the time we take electricity for granted. It is something which, we feel, is always there and we rely on it completely. But we should remember that there are vast numbers of men and women working in this great industry, controlling the machines and maintaining all the complex plant which brings the supply to us, and the power which will always be there as demand increases will be provided because of the men who are making and erecting the new plant and planning the development of our complex supply system.
The Reports themselves are about the work of these men and women, about 200,000, who work in the electricity supply industry itself and the others in fuel and the provision of plant and services. The Reports are a record of what these people have achieved, and I draw the attention of the House to some of the facts set out. They are a record of achievement of which the industry can be proud.
Towards the end of the Electricity Council's Report, Appendix VI gives in summary form the results of the industry since 1954–55. Over those nine years, the number of consumers served in England and Wales has risen by nearly 3 million, or by 22 per cent. In the same period, total sales of electricity have risen from less than 58,000 million units to 121,000 million units, in other words, more than double. In Appendix VIII, there is a table showing that the total output capacity of the power stations has risen from 17,000 MW to 33,000 MW, in other words, nearly double again. Appendix X shows that the total number of workers in the industry was 210,000 on 31st March, 1964. The figure nine years earlier is not given in the Report but it was 179,000. Thus, the amount of plant has nearly doubled, the output of electricity has more than doubled, but the number of workers has risen by only 17 per cent. In terms of units sold, this represents an increase in productivity of nearly 7 per cent. per year.
While these great advances were going on, the industry was successfully holding, its prices at a remarkably stable level. As Appendix VI shows, over the nine years the average price of a unit of electricity went up from 1·37d. to 1·62d., in other words, by 18 per cent. In the same period, retail prices generally rose by 30 per cent. I know that there have recently been further increases in electricity prices, about which I shall say something a little later, but for the moment I am dealing with the period covered by the Reports, and over that period, I submit, the industry's record is extremely good.

Mr. John Peyton: I realise that we are debating rather ancient Reports and that the Minister will necessarily be dealing with some of the details in them, but I hope, Mr. Speaker, that, with your permission, he will not feel


inhibited about raising the veil on what has happened since.

Mr. Lee: That is fair enough. In what I said a little earlier I tried to make sure that the hon. Gentleman would have the right to do that. I shall myself hope to say something, but I think it necessary, as we are debating these Reports, at least to mention them in passing.
I was giving a summary of what I felt was a fair appraisal of the accomplishments of the industry, suggesting that it was a summary of work well done and something upon which we could congratulate the whole industry. I think that this success is due to advances in labour productivity, improvements in thermal efficiency and, to a great extent, technical advances and economies of scale which have led to a steep reduction in the cost of new plant.
It is a striking fact that the average cost of new conventional power stations has fallen from about £60 per kW in 1955 to about £40 today. Our integrated supply system enables us to take advantage of the economies that can be obtained from large generating sets and from concentration on a relatively few designs. But it is also a great credit to the plant manufacturing industry that such a reduction should have been achieved.
There is no doubt that the story of the industry is one of great success, but, of course, within it there are problems and difficulties. First, the continual growth of electricity demand calls for and will continue to call for very heavy investment. The net assets employed in the industry now stand at about £3,000 million, and new capital investment is needed at a rate now in the neighbourhood of £600 million a year.
Nearly half is provided from the industry's own resources, mainly from depreciation funds and from the balance of revenue which is left after meeting outgoings and paying interest on borrowings. The remainder has to come from borrowings from the Exchequer, and, in times of economic strain such as we are now enduring, it is a very heavy commitment.
At present, capital investment is running at a high rate because the growth of load was underestimated during the late 1950s and the programmes for new

generating plant had to be sharply increased a few years later. Moreover, the cold weather in the winter of 1962–63 showed the need for greater margins of security in both generation and distribution.
The new capacity is being provided, but the effect is that the industry has to bear a heavy burden of expenditure on new plant which has not yet begun to yield a return. During the past two years, the growth of sales has flattened out a little so that revenues have been less buoyant and there have, during this period, been sharp increases in costs, in wages and that kind of thing. I am not sure that we have yet got the answer to why this has occurred, that is, why demand should have flattened, but it certainly has and it will be interesting to see whether it becomes the pattern in future years. Because of these things, price increases have recently been necessary.
Hon. Members who follow me in the debate may wish to refer to this aspect of our work. The need for price stability is very much in the mind of everyone, certainly in this Chamber, and I need hardly say that I regret that electricity prices had to go up. I am sure, however, that they had to. I satisfied myself that there was no possible alternative.
The industry must either earn the money which it needs for capital investment or it must borrow it, and the policy that we are following in this matter is consistent with that pursued by the last Government. Nationalised industries have financial and economic obligations to the nation and an industry which employs such enormous capital assets as the electricity industry does must earn a reasonable rate of return on them.
To emphasise a point in that connection, in the past two years we have had one round of price increases, in which each of the area boards has raised its prices, the last being the London Board on 1st July this year. Because, however, there are 12 area boards and some were able to postpone their tariff increases longer than others, one sometimes gets the impression that prices are going up more frequently than is the case. There has been only one round of price increases.
As I said earlier, over a long period the price of electricity has risen much less than retail prices in general. Even over


the two-year period ending 31st March, 1965, during which time there were these price rises, about which there have been complaints, the average price of electricity went up by 5½ per cent. and the general level of retail prices rose by almost exactly the same figure. I have already mentioned that in years gone by the increases in price were far and away less than the rise in the retail index itself. Even during the recent two-year period when there has been a rather higher rate of increase for electricity, it is still no higher than the advance in the retail index.
In speaking of prices, I should like to mention that the position of some consumers has been substantially improved as a result of our action. I refer to the unfortunate tenants who bought electricity, not direct from the boards, but from those landlords who exploited the opportunity to resell electricity, sometimes at a fairly enormous profit. I do not say that there were a great number of these people, but their number was growing and we felt that this practice had to be dealt with. Certainly, there were many tenants who were being exploited in this way and they could do nothing about it.
The Electricity Act, 1957, enabled the area boards to fix maximum prices for the resale of electricity. When I took office, seven years later, no maximum prices had been fixed. I do not deny that there were many difficulties, but I would have thought that they should have been overcome much earlier. I discussed the matter with the Electricity Council and was able to announce in the House on 22nd March that the area boards had agreed to fix maximum prices. This has been done with effect from 1st July. These maximum prices allow a fair margin for the landlord, certainly enough to cover all reasonable costs, and any tenant who is charged more than the maximum price now has a remedy open to him.
Another problem which has been with us for a long time and which it would be appropriate to mention is that of connection charges for new housing estates. This question arises in the House from time to time. Indeed, it was debated on the Motion for the Adjournment on 8th July. As my hon. Friend the Parliamentary Secretary explained, I am trying

to bring the gas and electricity industries together in an agreement which, I hope, will be acceptable to both of them and will ensure that consumers are free to make their own choice of fuel as far as is economically practicable. I hope that it will not be too long before such an agreement is worked out.
So far, I have spoken of the past and the present and I hope that what I have said will reinforce the impression that the annual Reports give an impression of an industry which is continually advancing in scale and efficiency. But what of the future? In this respect, one thing which is certain is that the industry will continue to be among the leaders of technical progress. It leads the world in the application of nuclear power. We in this country already have by far the biggest output from commercial nuclear power stations of any country in the world. We produce more nuclear power than the whole of the rest of the Western world, including America.
Last week, the Generating Board published details of another British investment that will help to maintain our lead. That is the A.G.R., which I announced in the House some time ago. One of these reactors is to be built at Dungeness and it will make nuclear power fully competitive with our best coal-fired stations.
As I have already informed the House, the Government are reviewing the size of the second nuclear power programme. In April, 1964, it was decided that a programme of 5,000 MW should be adopted for planning purposes for the years 1970 to 1975. This, however, was to be subject to review in the light of the information obtained from the Dungeness tenders. There will be a further statement when the review is completed and I hope to be able to make it before the end of the year.
Whatever the outcome of the review, the industry will continue to need coal for many years to come.

Mr. Eric Lubbock: May I interrupt the Minister? Does this mean that the programme for A.G.R. stations might now exceed 5,000 MV? Is this figure the minimum?

Mr. Lee: I should not have thought that there was the slightest danger of


its being reduced. With the success of the A.G.R., the hon. Member's assumption is certainly right.
No matter how the change-over comes, for many years ahead there will not only be a need for great quantities of coal, but the need will be for increasing quantities of coal. In 1963–64, the Generating Board used 61 million tons of coal and in 1964–65 it used 64 million tons. Fifteen new coal-fired stations are now under construction, partly to replace the older stations which are closing down. When these new stations are completed, the Generating Board will have a large proportion of its capacity in the form of new coal-fired stations with a working life of 25 years or more. These stations will burn coal with a high efficiency in the 500-MW sets which the Generating Board has adopted as standard for the next few years. Forty-seven of these sets are now on order. They will be able to produce substantially more power than the entire capacity of the industry 10 years ago.
Standardisation of size will yield economies in construction. I emphasise that it is standardisation that we are referring to here, and not stagnation. Prototype sets of 660 MW to operate at supercritical steam pressures of 3,500 lb. per sq. in. are now planned for the very early 1970s.
I turn to the transmission side. Here the industry is introducing transmission at 400 kV. Here again, I should like to say a few words on the subject, in which the House takes a very great interest, and I am glad it does, because it is enormously important. Very high pylons are necessary for transmission at this voltage and they cause some amenity problems, but we must not forget that without this move to a higher voltage the amenity problems involved in long distance transmission would indeed have become even more serious. One 400 kV line will carry as much power as three existing 275 kV supergrid lines or 18 of the standard 132 kV grid-lines.
Nevertheless, very great efforts are being made at considerable cost to reduce the impact of these new lines on the countryside. For example, in North Wales the Board proposed to place 2¼ miles of 400 kV line underground

at the crossing of the Glaslyn Estuary. Following a public inquiry, my predecessor decided that the length of undergrounding ought to be extended by another 1½ miles. The cost of the Board's placing the whole section underground will be about £4 million. Another section of 400 kV lines is being placed underground in the Peak District National Park following a public inquiry, and here the cost will be £3½ million.
I give these instances to show the type of cost entailed in undergrounding. At the same time, the industry is vigourously pursuing every line of research which holds out promise of reducing the enormous cost of placing such lines underground. Indeed, I was discussing the problem with the Council and the Generating Board only the other day and they were telling me about the work which was going forward.
It would be quite wrong and pointless to say there is any easy solution to this very difficult problem. There is, of course, a fundamental difficulty, because an underground line must be both insulated and kept cool along its whole length, and the two requirements are contradictory: insulation tends to keep the heat in. The most we can hope for in the foreseeable future, therefore, is some reduction in the enormous disparity which exists at present between the £50,000 a mile of 400 kV overhead lines and the £1 million a mile, the cost of the equivalent underground cable, but what can be done, I can assure the House, is being done.
I have seen some of the work being done at Leatherhead and other places and I can assure the House that neither the Board nor any of the employees are allowing anything to stand in their way in breaking through in this very important field. Indeed, research on this problem has top priority and every idea which promises to become a step forward is being actively followed up.

Sir Richard Nugent: Will the Minister, while on this point of transmission, tell the House what the prospect is of reducing the amenity problem by the use of D.C. transmission instead of A.C.?

Mr. Lee: There are researches going on. I know that it is going ahead in some


other countries. It is a point I am extremely interested in. I am not able at this point to say that there is a decision, but a lot of hard work is being done on it.

Mr. Arthur Palmer: Will my right hon. Friend not agree that the industry will get a 12 per cent. to 12½ per cent. return for the increased cost of undergrounding?

Mr. Lee: Yes, that is why we have to look at the costing factor of undergrounding as against a huge overall programme. I will say a word or two more while on the question of costing, because, of course, it is a very great problem at a time when all of us, I think, would like to feel that the huge amounts of capital expenditure which are necessary ought to be looked at very closely.
I hope it is clear to the House from what I have been saying that the Generating Board is not simply waiting for research to produce cost reductions. Even at present day costs they are laying a very considerable proportion of their new transmission lines underground instead of building them overhead in order to preserve amenities in the way we want it to do.
If I could give the House some figures on this perhaps it would answer the point which my hon. Friend the Member for Bristol, Central (Mr. Palmer) has in mind. The Board gave me some figures of the amount of money which it spends on underground cables and I give them to hon. Members because they are not generaly known and they may surprise hon. Members. About one-third of the total expenditure by the Generating Board on transmission lines in 1964–65 was spent on underground cables and by 1970 this is expected to rise to over two-thirds. During the three years starting in 1968 the Board expects to spend £39 million on 1,350 miles of overhead lines and £107 million on 500 route miles of underground cable.
These are astounding figures. I do not want to prevent undergrounding, but we must face what it means.

Mr. John H. Osborn: Would the right hon. Gentleman explain? I presume you are referring to low voltage transmission—

Mr. Deputy-Speaker (Dr. Horace King): I am not referring to anything.

The hon. Member must put his question to the Minister through the Chair.

Mr. Osborn: I beg your pardon, Mr. Deputy-Speaker. Could the Minister explain this figure in so far as it concerns low voltage transmission? How much of total expenditure is on low voltage as against high voltage underground transmission?

Mr. Lee: What I am trying to show is that the problem of amenity is being met to a very large degree. I do not differentiate between 400 kV. and 132 kV. The cost was astronomical. If we are to insist on more and more under-grounding, then we have to face the hugely increased percentage of cost in that operation. This puts into perspective the problem that we have to face.

Dr. Jeremy Bray: Would my right hon. Friend not agree that it is necessary to get into the public mind the size of the savings achieved by using 400 kV. distribution? It is no use simply quoting enormously expensive distribution costs unless they are related to the saving in generating costs and in energy lost in the distribution process. It is rather browbeating the public if one does not set against the cost of underground distribution the comparable savings of very high voltage distribution.

Mr. Lee: I am not disputing what my hon. Friend says. I think that the House will know we are very much concerned with amenity. I am not trying to subdivide the issue and discuss what is good and what is not. I wanted to show hon. Members what the Board is doing on undergrounding, because it, too, is very keen about the amenity side. That being so, I wanted to show the House the enormous costs which this is bound to entail.
I have spoken a lot about generation and transmission which are the responsibility of the Generating Board. The work which the area boards are doing is no less important, and if I say less about that it is certainly not because it is more difficult to single out particular developments to mention in the field of distribution.
However, the House may like to know that rural electrification is now approaching completion. Of the 280,000 farms in England and Wales, 94 per cent. have an electricity supply, compared with 32


per cent. on vesting day. Of the 1,800,000 "other rural premises", 97 per cent. have a supply, compared with 55 per cent. on vesting day. I am sure that the House will agree that again is a huge programme, upon which we can compliment the industry. I suppose that it means that it has enabled agriculture to become possibly the most highly mechanised agricultural industry in the world. We pay those in the electricity industry our compliments on the great work theat they have done in that respect.
About 16,000 farms are still without an electricity supply. Last year, rather more than 4,000 new connections were made, and the boards plan to continue for another two years connecting farms at the rate of about 4,000 a year. Thereafter, the rate will slow down considerably, and by 1970 there is expected to be a residue of about 7,000 farms without a supply. Half of those are farms that do not require a supply, which may mean that the farmer is unwilling to pay the connection charges demanded by the board. The other half can be given supply only at an excessively high cost, £1,000 to £1,500. Faced with costs of that order, we need to pause before advocating that the industry should seek to connect 100 per cent. of the farms.
Electricity boards are already incurring a loss of about £5 million a year on rural supplies, which has to be borne by the general body of consumers. At the same time, other uneconomic supplies are given to rural areas by the gas industry, and that is a problem that we are trying to look at now. There may well be room for closer co-ordination between the two industries and some give and take in areas where neither can hope to break even and where the presence of one merely increases the losses incurred by the other. In other words, there are areas in which both gas and electricity seem to be competing for the honour of supplying the greatest amount of subsidy to those concerned, and it may not be a bad idea to question whether the journey is really necessary in the case of one or the other. That is a problem that I am looking at closely.
In distribution, as in generation and transmission, the industry is pressing ahead with its research work. New equipment is being developed and improved working methods introduced to increase

the efficiency and security of electricity supplies. Within the last few days, the industry has announced the setting up of a new laboratory at Capenhurst which will concentrate on research into distribution and on appliances and methods of using electricity. The work done in that laboratory will form part of a research programme covering generation, transmission and distribution on which the industry is planning now to spend £10 million in the current year.
The very fact that research is being undertaken on such a scale is one of the best assurances that we could have of its determination to maintain the rapid pace of development which it has achieved so far. I believe that we can say with confidence that the industry has served the country well in the past. All that I have learned about it since I became Minister of Power last October has strengthened my conviction that it will serve the country just as well in the future.

Mr. Peyton: I did not want to interrupt the right hon. Gentleman, but we are very concerned to know about what appears to be a most important point; that is, the effect on the future investment of the industry of the announcement made by his right hon. Friend the Chancellor. It was a very vague hotch-potch of stuff which was put before the House the other day, and this is the opportunity to find out what is its specific effect on and application to this highly important industry.

Mr. Lee: I see the hon. Gentleman's point, but these are early days. As a matter of fact, there is no specific effect to which I can refer at the moment. I am having discussions with each of the industries concerned about short-term measures that they can take in the light of the Chancellor's statement. But at present I am not in a position to give any detailed statement of its effects.
If I may put it the other way round, suppose that the Chancellor had first of all gone into detail about each of the industries in an effort, shall we say, to cut them back, and had announced it afterwards. Then there would have been cause for apprehension and disquiet. I think that we did it the right way round. The Chancellor made his statement, and each of the Ministers who have responsibilities for nationalised industries will


now be discussing with the industries concerned how we can put into effect the general principles about which my right hon. Friend was speaking.

Mr. Peyton: Does the Minister mean that he anticipates a significant cut-back in investment on the part of the electricity industry? This is a very important and crucial point, and I must press the Minister on it.

Mr. Lee: If the hon. Gentleman will look again at what my right hon. Friend said, he was not talking about cutting back, but postponing and lengthening out the period. I have said today that I am quite certain that the figures necessary for capital development which the Board requires must go ahead, otherwise there will be a hold-up through the lack of capital and inability to meet loads, and so on. Within all that, there may well be areas in which we can defer certain capital developments, but there is no intention of deferring anything of an essential nature which might in any way imperil the development programme of the industry.
I was saying that I am quite sure that we all congratulate those who lead the industry and those who work in it on the very remarkable achievement that they have to their credit. It is a great pleasure for me to be able to work with them. In the future the industry will be one of the highly technical industries upon which we can rely with the very greatest confidence. We are all now dedicated to the idea that the national product must increase. It will mean greater demands on energy than the country has needed in the past. The achievements that the industry has to its credit give us the greatest confidence that, no matter what the demand may be on this very fine industry, such is its competence that it will certainly be able to meet it.

4.49 p.m.

Mr. Nicholas Ridley: The Minister has given us a very thorough survey, for which we are grateful, of the problems of the electricity industry. Some months ago, the Minister was described in The Times as "one of the three weak Freds". It would be only fair to congratulate him on having got through this rather traumatic summer without undue damage. He looks very well and very fit, despite the late sitting

that we have just had, when, no doubt, he was here until 11.30 this morning.
The right hon. Gentleman has avoided falling into any of the pitfalls of the 200 million tons of coal that have been dug for him. He has avoided all the iron and steel traps which have been set for him. He has avoided setting light to any explosive mixtures of gas during this first Session of Parliament as Minister of Power.
I think that the right hon. Gentleman has even been able to pour a little oil on the troubled waters of his own party. But the moment of truth will come next Session, when he has to face many of the serious problems confronting the fuel industries, and he will have trouble from his own supporters if he pursues the sensible policy which in many respects he has so far pursued. If I might misquote "Gray's Elergy", next Session "the lowing herd will wind slowly o'er the Lee."
Many questions remain unanswered. In previous debates many questions have been asked about the fuel industries, and I am sorry that some of the major issues were not dealt with by the right hon. Gentleman today. My right hon. and hon. Friends have pointed out the enormous amount of capital that we require for the fuel industries. Between 1965 and 1970, £3,500 million have to be found for this industry, and if one adds to that the amount that it is to find from its own resources, there is a total of between £7,000 million and £8,000 million worth of investment which it will require in the next five years.
During the debate on the Gas (Borrowing Powers) Bill my hon. Friend the Member for Yeovil (Mr. Peyton), my right hon. Friend the Member for Guildford (Sir R. Nugent), and many others, asked where this money was coming from. It is no good going on producing borrowing powers Bills and Orders when the Government, clearly, have not the slightest idea of how they are to raise these enormous sums of money; and I am not talking only about these two industries. There is also the public sector, private industry, and other vast fields where capital will be needed. So I must ask the Government where this money is to come from. We have had no answer to this question when we have asked it in previous debates.
By means of the Budget the Government have attacked the gilt-edged market. They have devalued their own credit in the market, and, as my right hon. Friend the Member for Wolverhampton, South-West (Mr. Powell), who I am delighted to see here, pointed out in a recent article in the Director, the Government's credit is not only nil; it is minus. Between 1958 and 1963 the net borrowing which the Government—and this was a Tory Government—were able to achieve was £3 million. Last year the figure slipped to minus £467 million. Not only have the Government got no credit; they are a distinct liability on the market, and they are unable to raise one penny of this sum.
We have to realise that this money will come from overseas drawings, from overseas borrowings, and from the Government's printing presses. There is no other source from which this large investment capital can be found. I know that these are not questions for the Parliamentary Secretary to answer, but they are questions for the Government to answer, and the hon. Gentleman is responsible for assuring us that every penny of electricity investment is vital and cannot be done without. We cannot go on investing money without having absolute certainty that this investment will yield a proper return, is right in its priorities, and is essential to the future of the nation.
It is not only a question whether the investment is correctly made within the electricity industry, but also whether it is properly made vis-à-vis other industries. One fundamental reason why the Government are right to adhere to the target set for the nationalised industries is that it gives some sort of guarantee that at least the investment is being asked to earn a proper return.
The whole of the electricity industry's investment depends on its forecast of demand for the future. We have, first, the capacity forecast which is based on an exponential curve of past experience and about which a lot is said in the Select Committee's Report. It is based on a 4 per cent. per annum growth rate, or a 25 per cent. increase in growth between 1964 and 1970. Secondly, the Electricity Council has decided to increase what is called the planning margin from 14 per cent. over normal capacity to 17 per cent. This is to allow for exceptionally severe

weather conditions, plant breakdowns, and other mishaps.
I should like to consider for a moment whether those two assumptions are valid. We must ask ourselves these questions in the present conditions of scarcity of capital. First, do the Government really think that we are going to achieve a 4 per cent. growth rate? We have been achieving a 2 per cent., or 2½ per cent. growth rate, and I have no doubt at all that since the party opposite took over our affairs the rate has been very much less than 2½ per cent. The First Secretary of State has done all that he possibly can to reduce the rate of growth, and this does not augur well for achieving the 25 per cent. growth which we are expecting over the next six years.
Within this, will the demand for electricity grow as fast over the next five years as it has grown in the past? The Minister said that it had flattened out, and that the demand curve was not going up. It is based on the 7·8 per cent. increase per annum over the last 10 years, which we will not perhaps achieve; so I think that there are serious grounds for doubting whether the Government will, in fact, have such a large commitment as the electricity industry is expecting.
I propose now to deal with the 14 per cent. to 17 per cent. increase in the margin. During the bad winter of 1962–63, which was the worst for 100 years, the kind that might occur only once, twice, or perhaps three times in 100 years, we had a 7 per cent. margin, and we also had a work-to-rule among electricity employees. Even so, we got through. We had cuts in voltage. We had disconnections, and we had some inconvenience and even some hardship, but the hardship suffered during that winter has to be set against the enormous demands on capital, and the difficulties which the Government will have in finding the money, before we can decide what we should do.
In its evidence to the Select Committee the Central Electricity Generating Board said that it would have been all right during that winter if it had had a 14 per cent. margin, and no work-to-rule. If it would have been all right in that winter with 14 per cent. and no work-to-rule, it is arguable whether it is right to bump up the margin to 17 per cent. by 1970, which it is going to do. According to the figures


given by Sir Ronald Edwards, by 1970 the industry will have a capacity of 66,000 mW and a demand of 54,000 mW. If my arithmetic is not incorrect that is an 18 per cent. margin.
What all this adds up to is that the margin will increase from 7 per cent. in the bad winter of 1962–63, to 18 per cent. in 1970, and this large increase in the margin has to be justified by the Government. I am not saying that it is wrong, but, in view of the scarcity of capital, we want to hear the justification for these very large increases in capacity which could be a mis-investment of our money.
A few minutes ago my hon. Friend the Member for Yeovil pressed the Minister to tell us what the Chancellor meant in his statement last Tuesday, when he said:
The nationalised industries will be called on to follow a similar course of action.
The course of action was not clear and the only bit that can possibly apply is the statement that the Government intend to
slow down the rate of expenditure on capital projects."—[OFFICIAL REPORT, 27th July, 1965; Vol. 717, c. 228–9.]
What does this mean? Does it mean that the C.E.G.B. will be asked to stop or to postpone projects? What is the extent of the cut-back, and what will be the effect on the margin, and on capacity in the future? It is no good using words and phrases like that unless the Minister tells us exactly what he means. If he gives us the full details of what is implied, we can assess its effect.
It may be that there is some scope for reduction. The difficulty lies in the fact that the next five years are the years when we shall be short of capacity, whereas by 1970–75 we may be making the mistake of over-providing. I very strongly endorse my hon. Friend's question. We expect to have a clear statement from the Parliamentary Secretary as to what he has in mind—what the extent of the cut back will be, and what effect it will have on electricity supply.
The figures for raw materials of the industry show that the consumption of oil, in terms of coal equivalent, will increase, by 1970, from 9 million tons to 12 million tons, that the consumption of coal will increase from 70 million tons to 78 million tons, and nuclear power

from 1·3 million tons to 12 million tons, provided that all the factors which the electricity industry takes into account remain equal.
Indeed, Mr. Brown, the Chairman of the Generating Board, said that he would be surprised if the take of coal ever exceeded 80 million tons. We would like to know the Government's idea of that. The final point that emerges from a consideration of the raw materials of the industry is that the economics have to be decided now as to what power stations will be built—nuclear coal-fired or oil-fired—for the period five, six, or seven years ahead. If the Government are to change the rules between now and then it will upset the economic calculations which the industry has made.
In a previous debate on the Gas (Borrowing Powers) Bill my hon. and gallant Friend the Member for South Fylde (Colonel Lancaster), my hon. Friend the Member for Sheffield, Hallam (Mr. J. H. Osborn), my hon Friend the Member for Yeovil and many others, repeatedly asked the Minister whether he would alter the financial target for the gas industry. We asked whether he would do this, or place an oil tax on the gas industry, or reduce the oil tax on the electricity industry, or do something about imported coal and the prohibition thereof. He would then falsify all the economic facts upon which the Electricity Council has been basing its forecasts for the future. So it is of vital importance to have a statement about this. If we are to invest between £7,000 million and £8,000 million in the next five years we want to be certain that we are investing on an absolutely accurate assessment of the costs of competing fuels in the future.
The Minister has chosen to do this by means of his celebrated Energy Advisory Committee. He keeps calling for an integrated fuel policy. The Labour Party's election manifesto talked about having a co-ordinated policy for the major fuel industries. But, whatever he does, it is something of much greater importance than debating the matter across this Table; it is a question of not wasting precious British capital in the future. That is why my hon. Friends have been pressing the Minister. We want to know what the policy will be. We do not believe in an integrated fuel policy, with everything parcelled out and worked out


for years ahead, but we want to know the worst, and what will come from the Government on this subject.
For one who feels as strongly as I do about this matter it is disappointing to learn that the Energy Advisory Committee has met three times during the nine months that the Government have been in office—once for one-and-a-quarter hours, once for three-quarters of an hour, and on the third occasion for an unspecified number of minutes. Perhaps we may be told how long the third meeting lasted. This is not producing the answers. We do not mind how the Minister arrives at them, but we want to know what he intends to do to protect fuel generally.
My hon. Friend the Member for Yeovil referred to the Committee as a useful talking shop, but said that the results would be anything but unanimous. We have some doubts whether this is the right way to arrive at a fuel policy, but that is not so much our business. What is our business is to be told the Government's intentions, and we look forward very much to being told this.
I want to say a few words about the new tender for Dungeness B. There is great interest in this new nuclear power station, and it is quite right to congratulate both the Atomic Energy Authority and the Nuclear Power Group on having produced a design which has been proved cheaper than any other design available in the world. This is a great tribute to British technology, and at a time when we have had some reverses in technological development it is right to pay tribute where it is due.
This represents a breakthrough, and it is reflected in the C.E.G.B.'s forecast that nuclear power which now provides 1 million tons of coal equivalent, will rise to 12 million tons in 1970. A twelve-fold increase clearly indicates that this is something that works, something which is winning and which will gain in importance. There has been some speculation why the American boiling water reactor tender was so high. It is better to face this point, and not to brush it off.
That is why we are extremely glad that the Central Electricity Generating Board has published a booklet explaining in fairly technical but very clear and concise terms the factors upon which it

arrived at its decision. Having read it with great care and interest, I find it a most impressive and convincing document, and one which has done great service to British industry.
To my mind three points emerge. First, the conditions of tender were identical for all tenderers. No advantage or disadvantage was given to any one or the other, with the single exception of the duty upon imported materials and machinery which might have been bought from America. The total cost of the duty, included in the American tenders, was £800,000, which is negligible in a sum of over £100 million, and nobody could claim that the element of duty on imports would in any way have changed the result.
The second point is that the United States' tender was prepared with full freedom to decide where to buy its materials and plant, whether to import or to manufacture in this country, without any duress being put upon it to conform to conditions which did not suit its system. It had a free run.
The third point is that the criteria—the bases upon which the tender is assessed—are stiffer here than in America. The productivity of labour is probably lower in this country, which increases the cost, and the fuel costs may be higher here. The real defect of the American reactor is that its lack of availability has increased its cost to the C.E.G.B.
To anybody who doubts that this has been an honest and a fair process, I would say, why do not the Americans call for a tender for the A.G.R. on the Oyster Creek site in America? If anyone has any doubt—if anybody believes that there has not been fair play—let him call for a tender for a British A.G.R. on the Oyster Creek site. He would come to the conclusion that it would be cheaper than anything which might be tendered for by the Americans, and it would put finally to rest the doubts raised on this question.
There is one other question, which has wider implications. Should not we have a foot in the boiling water reactor camp? Are we right to put all our eggs in the A.G.R. basket? I believe that these are not the same type of reactors. The point is that the A.G.R. is a reactor with


a larger power output than the boiling water reactor. It is suitable for advanced industrial countries, where there is dense population and heavy use of electricity. As such it has potentialities in the advanced countries. The boiling water reactor is suitable for sparsely populated countries where the use of electricity is lower. We cannot confuse the two.
If we were now to try to get on to the boiling water reactor bandwagon, we should be five years too late. We should be pouring our precious resources into something which the Americans have already developed and we should be trying to ride both horses at once. I believe that we have backed a winner in the A.G.R. I congratulate those concerned and I hope that the Government will now turn their attention towards increasing the exports of this product and making sure that we can get a return from our very large investment in it.
The Minister talked at some length about the prices structure of the electricity industry. Clearly, the financial target, the economic obligation, has tended to raise the price of electricity. Sir Ronald Edwards said at the power conference at Brighton that, in the last 10 years, the price of electricity had gone up by approximately 21 per cent. If it had not been for the financial target, it would have gone up by only 18 per cent. So, hitherto, the effect of the financial target has been to replace an increase of 18 per cent. with one of 21 per cent.
This is a small price to pay for the immense improvement and the immense advantages of the targets which I discussed earlier. My hon. and right hon. Friends laid down those targets when they were in Government and we on this side believe that they are vital. We congratulate the Government on sticking to them: we realise that it has been a somewhat embarrassing and difficult decision for them to take. We welcome their conversion. My hon. Friend the Member for Yeovil paid great tribute to the Minister for this. We hope that this can cease to be a matter of dissension and that the targets can now be accepted as an essential discipline for the nationalised industries throughout our economy.

Mr. Lubbock: In spite of the fact that the present Ministry has persevered in the policy of the financial targets, would

the hon. Member not think that there should be a uniform policy for reference of price increases by individual electricity boards to the National Board for Prices and Incomes? Is it not anomalous that one case of an increase should be referred to the Board and yet another, which relates to a larger increase, is not referred?

Mr. Ridley: I have noticed the hon. Gentleman's Question on this subject and the Answer which he received. I intended to refer in passing to this. There is little point in referring a price increase of this sort to the National Board for Prices and Incomes, when 80 per cent. of the costs of the area boards are represented by the bulk supply tariff which the Generating Board places upon them.
The Generating Board appears to be in a position of immunity from the hon. Member for Orpington (Mr. Lubbock), who cannot ask Questions about it, from the National Board for Prices and Incomes and from the consumers themselves. So this problem is slightly more complicated than he suggests. It is, obviously, anomalous to refer one increase to the Board and not another. But it would be wrong to try to look at this problem as a small one. We may have struck here an administrative weakness which should be considered seriously.
The London Electricity Consultative Council has made a request, as a result of this point, to have a seat on the Electricity Council. What does the Minister think about this? Is this an idea which he will take up? I should like to hear his views. It does not seem a very impressive idea to us, but he may accept it. We on this side of the House feel that the Central Electricity Generating Board managers in the country should have representation on the area boards, so that they can be in closer touch with the protests of consumers and the commercial considerations which are in the minds of the area boards.
Clearly, the C.E.G.B. should be brought into closer contact with public opinion. That is one of the structural problems to which some of my hon. Friends may wish to refer and on which I should like the hon. Gentleman to comment.

Mr. Palmer: I hope that the hon. Gentleman is not unaware that this present structure of the electricity industry is the revised structure of the Act of 1957, which his party brought in and which, in many details, was criticised from this side of the House at the time.

Mr. Ridley: I would never be dogmatic and assert that any organisation was always right. I can think of sweeping changes which I would make on the benches opposite. Although it is only eight months since they were appointed, I think that the whole organisation should be turned upside down and bundled out through that door.
This would not prevent me from admitting that, every few years, in organisations like the nationalised industries, which are a new experiment in this country—we have had them for only 15 years, which is, in my opinion, too long —any experiment which we can do to improve on them is welcome. The hon. Gentleman and I sit on the Select Committee on the Nationalised Industries and we think about how these things should be better organised. I am making a suggestion which I hope that he will consider favourably.
It would be wrong of me to follow the Minister at any length into the subject of amenity. I should like to sly a few words about it, but I think he gave us such a comprehensive and interesting survey of the difficulties of undergrounding lines, the costs thereof and the increasing share of the distribution capital which will be used for undergrounding lines rather than for overhead transmission.
Some progress could be made with undergrounding the smaller lines, the distribution lines. Nobody believes that the 400 megavolt lines can be undergrounded in any significant numbers, but the forest of smaller wires which festoon our countryside are the ugliest. These are what people are beginning to mind more than the rather magnificent striding pylons which can look very fine over open, hilly country and which can be made a success. In any case, I do not believe that it is practical to put these underground. Much more thought is needed on this subject.
The success of the A.G.R. may enable nuclear power stations now to be put inland. This will mean that they can be put nearer to the load and this, in turn, could reduce the length of transmission line which is necessary. A new approach may be necessary. It may be necessary for the C.E.G.B. to plan its stations, its lines and its loads so better to avoid the areas of outstanding natural beauty.
The new techniques of D.C. transmission—super-conductivity, fuel cells and all the great promise which research and science offer to the electricity industry—may obviate the need for these massive strings of pylons. We urge the Government to proceed with research into this subject. We welcome the Report of the Electricity Council, we congratulate the leaders of the industry and we hope that, in the year to come, it will continue to make the good progress which we on this side of the House recognise.

5.19 p.m.

Mr. Arthur F. Palmer: I listened with great care to the hon. Member for Cirencester and Tewkesbury (Mr. Ridley), who opened for the Opposition, but I thought that there was a contradiction between his fears that there might be a reduction in the capital allocation to the electricity supply industry in future and his doubts whether the money could be found. I agree with him that all investment in electricity supply must be justified on its merits and properly related to the other fuel and power industries, but I have great difficulty in understanding the argument that the capital cannot be obtained. After all, it is a public utility industry with little financial risk.
It is obtaining 50 per cent. of its new capital from its own resources, and its history shows that it has always expanded in good times and in had. I should have thought that, provided that we maintain full employment and reasonable national productivity, there should be no great problem in devoting a sufficient proportion of the national resources in terms of material and manpower to the continued expansion of the electricity supply industry. Unless it is based on doubtful and academic financial assumptions, I feel that the hon. Member's fear is a little far fetched as an exercise in logic.
I want generally to make a point which I made, as did other hon. Members on both sides of the House, when we recently discussed the affairs of the gas industry, I think for the third time during this Session: the problems of electricity supply, as those of gas, are problems of fuel and power generally. That to me means an expression of fuel and power policy, which is to see electricity, gas, oil, coal, water power and nuclear fission in a consistent and national relationship with each other even if the balance of that relationship changes from time to time. I think that it is fortunate—it was not always the case—that this point of view is beginning to gain supporters within the fuel and power industries themselves.
Thanks to the helpfulness of my Whips and the co-operation of one or two hon. Members opposite, I had the opportunity recently of attending the British Electrical Power Convention at Brighton. I attended some of its sessions; and I serve on the council of that body. It will be remembered that the theme of this interesting conference was "Electricity in the Fuel and Power Future". Leaders of the coal industry, the gas industry and the oil industry attended the convention, and read papers in spite of the fact that the convention is primarily an electrical convention and was organised by the electrical industry.
It is unnecessary to say that there were differences of emphasis and points of view between the leaders of the industries who spoke at the convention, but what was outstanding to me, as one with some experience of the power supply industry and the outlook of its rivals, was that there was a very high degree of unity and agreement between the participants at least on the essentials, and the fact that these fuel industries are growing more naturally together in understanding is a great step forward.
There was agreement, for instance on the proposition that for a long time ahead electricity is married principally to the coal industry, but, if I may put it this way, in a kind of polygamous relationship which does not bar secondary alliances with both nuclear fission and the oil industry. On the other hand, gas is disentangling itself from a long-established marriage with the coal industry

and, for better or worse, is now morally married to a new found partner, oil. If one may put it this way, it seems that the gas industry is fast heading towards monogamy. I have never been able to make out whether polygamy or monogamy are desirable or undesirable states in themselves. It is largely a question of variety against concentration. But I do not think that anyone would disagree that polygamy is always a more complicated relationship, and so it is proving for the electricity supply industry.
In fact, the point which I want to make today—and I hope that my hon. Friend will deal with it in his reply—is that the electricity supply industry is being very much penalised in relation to the gas industry—and this makes it difficult for the country to obtain a national fuel and power policy—because of its broadmindedness. It is asked to sustain the coal industry, which it is glad to do on a fair basis, not simply for the good of the coal industry, although that is desirable in itself, but because, since the two industries are very much joined together, the prosperity of the coal industry in the future is of real and material interest to the electricity supply industry.
The coal-fired power station is cheap in the matter of capital cost, and provided that the right part of the country is selected, usually near a coalfield, it is often cheap in running costs. But since the finances of the Central Electricity Generating Board are all in one, it is only right that the C.E.G.B. should have the opportunity to use oil where oil happens to be cheaper—and that largely depends, as I say, on the siting of the power station. This is not to the detriment of the coal industry, because if the Central Electricity Generating Board is free to use oil when it pays it to use oil, then it is made very much easier for the industry to use coal where the coal cost is marginal in other places, and in that sense I have never been able to see that there is any great contradiction between the continuing use of coal by the electricity supply industry and the ancillary use of oil, or, for that matter, the ancillary use of nuclear fission. In considering the electricity industry in relation to the gas industry, there is the unfortunate fact that the electricity industry has to pay tax on all the oil which it uses whereas the gas


industry is let off scot free. I believe that there is a rather abstract technical processing justification for it, but in fact the distinction is obviously wrong. I hope that my right hon. Friend will pay urgent attention to this, which I think is an anomaly which the electricity supply industry has a right to bring to the notice of the House. It has a right to ask that some relief be granted, especially if it is right to protect the coal industry during a period of redeployment—and I think that it is right to do that. It need not necessarily be permanently protected all the time, but certainly until the coal industry is finally rationalised, and the protective taxation should be applied fairly. Handicapping should be fairly done, if we are to obtain a realistic fuel and power policy with competition between the various parts.
I should have thought that one possible way forward would be not simply to raise the level of taxation on oil for the gas industry to the full extent which is applied on electricity but rather to devise a special public utility oil fuel tax which could be imposed at some moderate level, equally and fairly to both gas and electricity.
Another basic fuel and power proposition which I should like briefly to mention is in relation to this new-found energy source, nuclear fission. When one talks rather loosely about nuclear power one often overlooks the fact that, from the public supply of energy point of view, it can be utilised only through the medium of electricity. This is the other secondary, ancillary, polygamous alliance of electricity which is inescapable.
For this reason, I have always felt that it was wrong that the electricity supply industry was forced into adopting nuclear power as an energy source without it stating that the time had not been reached when it was a sound commercial proposition. Since the development of nuclear power depends very much on electricity power, it is only right that the electricity supply industry should have been able itself to make the decision as to how much nuclear power it should use.
One of my complaints about the former Administration was that in the middle 'fifties they unguardedly and, I believe, wastefully rushed the electricity supply industry into an over-large nuclear power programme. While we all welcome this

form of energy as a new scientific development, until recently nuclear power has tended to make the supply of electricity more expensive than it would otherwise have been, even without it.
I appreciate that, looking ahead, expenditure of this kind is justified. Nevertheless, when it comes to deciding the future size of a nuclear power programme I would rather trust the judgment of the C.E.G.B. than all the pressures which come from outside, including the Atomic Energy Authority. I say that because the C.E.G.B. must necessarily temper its enthusiasm for technical and scientific progress with a degree of commercial caution. Whatever might be said about Government policy, new or old, the C.E.G.B. obviously pays more attention to commercial questions than the Atomic Energy Authority is obliged to do as a non-trading concern.

Mr. Lubbock: Would the hon. Gentleman not agree that in the light of the report which we now have on the A.G.R. station, the logical thing would be for the C.E.G.B. not to order any more coal-fired stations but to go in for a complete nuclear power programme from now on? How could we have developed the A.G.R. technique had we not had a nuclear power programme for electricity supply from which to accumulate experience which, in turn, enabled us to make further progress?

Mr. Palmer: I am not denying that, and I have not been arguing against the development or use of nuclear energy. I have merely been saying that the size of the nuclear power programme should be largely a matter for the judgment of the C.E.G.B. I am certainly not against nuclear power, but I should have thought that it would be generally acknowledged that there was undue haste at one stage, as was proved by the fact that the industry was obliged to cut back. For this reason the matter should have been left to the judgment of the electricity supply industry itself in the first place. We should have had a more rational nuclear power programme than the one which was forced too fast.
To obtain maximum efficiency from nuclear power plants—and while I am concentrating in this part of my speech on nuclear power, these remarks apply to modern coal and oil fired plants, too


—they must be big and concentrated. At present Government policy is to site nuclear power stations a long way from the centres of population. This means the industry being faced with extra problems, the main one being the transmission of the energy away from the station to the ultimate consumer.
Indeed the transmission of power from one part of the country to another is becoming one of the major problems of the industry. Of the many developments in the electricity supply industry initiated during the relatively short period of office of Lord Hinton, one of the most important has been the understanding of this question of transmission as not just a technical problem. To appreciate what is truly involved in this small, concentrated island, we must see it as a social problem as well.
I do not intend to discuss at length the interesting and technical issue of under-grounding compared with the more conventional overhead method of conveying electricity in large quantities from one part of the country to another. This is a difficult technical matter where the laws of nature are biased against the engineer.
Nevertheless reference was made to the use of direct current. I think there has been some neglect in research into the use of d.c. A good deal of work on the transmission of d.c. has been done overseas, particularly in Sweden, Russia and the United States. A considerable amount is known about it in those countries, but the industry in Britain has become a little too conservative minded, in the technical sense, on this issue. We were one of the first countries to develop the universal a.c. system, and it seems that having been done that we have not considered the new advantages of transmitting by d.c. in a modern setting. Without going into all the technical aspects involved, d.c. may be more easily undergrounded and that it is more flexible from the transmission point of view in some other ways than a.c.
The C.E.G.B. would do well also to remember that the huge central power station may not always be the only way of producing electricity. Growing transmission difficulties may in the end force a return to simpler local methods. I realise that these are fanciful words at the moment, but we must consider this development and, in this connection, I

understand that work is already being done on fuel cells for domestic and factory use. In the end these may be nuclear powered.
While we welcome the exciting developments which are taking place in the nuclear power programme—the new Dungeness B station and so on—I suggest that the industry should not put all its technical methods and resources in one package whatever the label. The case for having diversity technical approach is always strong, because technological changes are taking place the whole time.
I will now deal with a matter which is of considerable financial and organisational interest. Since the war three major Acts of Parliament have affected the industry. There was the Electricity Act, 1947, which was the fundamental nationalisation Measure, followed by the Electricity Reorganisation (Scotland) Act, 1954, a Conservative Measure which broke away the Scottish electricity supply industry from the industry in the rest of the Kingdom—which I have always felt was a mistake—and then there was the Electricity Act, 1957, another Conservative creation.
I played, if I may say so modestly, some active part in the 1957 discussions both on the Floor of the House and in Standing Committee. The Labour Party did not oppose that 1957 Measure in principle, because we accepted that some degree of decentralisation had been proved necessary by experience. My own view is that, provided a Conservative Party accepts the principle of public ownership, I am in favour of its playing a proper part in ideas for the natural evolution of the industry, in bringing about improvements, although I hope that, mercifully, it will not be in a political position to make many changes from these benches. It is the proper rôle of a Conservative Party to accept public ownership after it has lost the battle over its introduction and then to join in the improvements of the way in which it works out in practice.
It was a little in that understanding spirit that some of us were prepared on this side to accept the 1957 legislation as bringing about a necessary measure of reorganisation based on the Report of the Herbert Committee, but that did not mean that all the features of that legislation were accepted by us in detail—

Mr. Peyton: That has been the attitude of successive Conservative Governments over a period of years. What we have been waiting for in vain has been some reciprocity of that attitude by the party opposite towards private industry.

Mr. Palmer: I would probably not be in order if I went into the interesting question of my party's attitude to private enterprise, but I do believe that in a Socialist economy a Conservative Party has quite a useful and constructive rôle to play, although I prefer that it should do so in Opposition.
In my view, there were faults in the 1957 Measure, and I was therefore delighted to hear the hon. Member for Cirencester and Tewkesbury (Mr. Ridley) suggest that the Central Electricity Generating Board was too far away from the consumers. It was precisely that point that some of us on the Opposition side made in Standing Committee about the new 1957 structure. One of the outstanding weaknesses of the industry today is not decentralisation, in the technical sense, of the area boards, or decentralisation, in the technical sense, of the Generating Board. That was sound, and it was one of the major recommendations of the Herbert Committee.
What is very wrong with the industry—and I make the same point about the gas industry—is that at the head we have this rather vague Electricity Council, this confederal body; that we have not, as the Herbert Committee recommended, a strong central executive to make the decisions that must be made somewhere in an industry of this size on a national basis. Mind you, considering the difficulties it has to face, because of its very nature, I do not think that the Electricity Council does a bad job, and it is very much assisted by the persevering personality and knowledge of its present Chairman, Professor Sir Ronald Edwards, who brings great powers of logic and judgment to bear on the various problems. But, all the time, in order to get a national policy, he has to work very hard. There is a very great tendency on the part of the area boards to look to the Electricity Council as their defender, and they can always join together in the Council to form a majority against the Generating Board. That kind of clash is aggravated by the fact that the area boards are distributors,

while the Generating Board is their sole monopoly supplier.
The trouble shows itself in many ways, but particularly in pricing policies. Not only is the Generating Board the sole wholesaler, but it also fixes the prices. I have never heard of such an extraordinary arrangement, whereby a monopoly wholesaler is able to fix a price to a tied customer. I know that it is supposed to be done in consultation with the Electricity Council, but, in the long run, the monopoly wholesaler has the final word. It is interesting to remember that this was something against which we on this side argued very strongly in 1957. We said that it was wrong that the Generating Board should fix the bulk supply tariff; and that the proper body to make the arrangements was the Electricity Council in consultation with the Minister, but that was not done.
The most outstanding example of this rift in price policy is in the industrial price policy. It is accepted on all sides of the House that our greatest national need is to improve industrial productivity, and there is a very close and well-known relationship between improvement of industrial productivity and the installation of abundant supplies of electricity. Our British use of electricity, measured either in terms of kilowatts installed per worker or kilowatt hours used per worker is very much lower than in comparative industrial countries. That has been the case for a very long time. It would not be too bad if our relative position was improving but, judging from the recent figures, our relative position is worsening.
One of the most disappointing features of the 1964 Report of the Electricity Council, which is supposed to tell us all about everything in the industry, is that it does not devote very much space at all to the question of improved and increased industrial electrification. I know that the reasons for the low present use of electricity per worker in British industry are complicated, and are not all the concern or responsibility of the supply industry. But I believe that the electricity supply industry could do infinitely better than it is doing in the matter of rapid industrial electrification by improved sales and promotional policies, and by closer co-operation with other industries, both nationally-owned and privately-owned.
I should like to see a combined operation undertaken by the electricity boards, British Railways and the electrical manufacturers to make home railway electrification much more attractive than it is. It is nothing short of a national scandal that we should have this direct use of oil on a railway system in a country that is still packed underground with coal and teeming with power stations. We bring in oil for direct use on the railways, and this is having a most serious effect on our export trade in electric traction vehicles. Foreign buyers say that there is not very much practical experience for them to go by in this country if they are to buy goods from British electrical manufacturers.
I am also all for close co-operation between the Central Electricity Generating Board and all large private manufacturers and users of power in order to get industrial electricity prices reduced as far as possible, but the stumbling-block is the general internal tariff structure in the supply industry, which is much too rigid for quotation purposes. In the annual report there is at least news of progress being made, in that the Electricity Council has appointed a working party consisting of members of the Council, the Generating Board and the area boards to look at the basic tariff structure of the industry. The terms of reference include the words:
… so that commercial policies can be formulated with long-term trends in mind.
This emphasises the point I made earlier about the organisation of the industry. If the Electricity Council was able to work together properly there would be no need for it to appoint a special working party to resolve the differences which obviously exist. It gives emphasis to the the point that what is required in this industry is much more single-mindedness at the top.
I was delighted to hear the remarks of my right hon. Friend the Minister that no capital cuts were contemplated in relation to electricity supply. I hope that this is a firm assurance, because it would be a tremendous error if we cut back on the rising electrification of our country.
Capital is essential but this industry is run and inspired by human beings. The success of the industry—it has had many real success—is largely due to the efforts, the knowledge and skill of the employees

of all grades. It should never be overlooked that the employees have to give a 24-hour service. They are on the job day and night, whether in the centre of a great city or far away in a remote rural hamlet, and they often have to do it under very adverse working conditions of weather a point which is often overlooked by the consuming public.
This House owes it to the employees of the industry to congratulate them upon a very successful year's work. Anything I have said a little critical about the policies of the industry concerning mainly top direction is put forward, I hope, in a most constructive way. That is my intention, because I am anxious to assist the continued success of a publicly-owned industry which I firmly believe is a great instrument for human progress.

5.52 p.m.

Sir Richard Nugent: I am glad to follow the hon. Member for Bristol, Central (Mr. Palmer). The House always enjoys hearing his speeches about the electricity industry. We respect his very expert knowledge on this subject. I agreed with the greater part of what he said.
I am a little doubtful about his view that the Council should fix a general tariff instead of the Generating Board fixing it. The Council has ways of making its views effective and the fixing of the tariff was done in an objective way. Certainly it was a way which the Select Committee had no reason to criticise at all. On the hon. Members comments about my party putting the 1957 Act on the Statute Book and the part which he said the Conservative Party should play in reference to the nationalised industries I noted that he said he preferred to see us do so in opposition. I hope that he is making the most of it now because he is not likely to see it for very long. In the rest of his speech, I think he interested the House and made a most valuable contribution to the debate.
The Report we have before us has the defect of being so very much out of date. It is the 1963–64 Report. I had hoped that the Minister would tell us a little more about what would be in the 1964–65 Report, which I imagine will be published in the next month or two. It is difficult for the House to debate the affairs of this great and important industry when our information is so very


much out of date. I join with my hon. Friend the Member for Yeovil (Mr. Peyton) in his criticism of the Minister's statement about the effect of the Chancellor's cuts on this industry. I ended in not knowing what the Minister meant, whether he meant that the capital programme was to stand unaffected or that there was to be some postponement of some of the major items of capital expenditure. I do not know, and I am sure the House does not know either.
I ask the Parliamentary Secretary, when he winds up the debate, to clarify this, because it is of immense importance. Let us be quite plain about it. If it is necessary to postpone some of these major items for six months or more, the effect will be exactly the same as cuts. Past experience has taught us that this is the most unwise kind of cut to make because it throws out of gear a vast programme which has repercussions from which it takes several years to recover. I would sooner see other solutions to the capital problems in which the Government are involved.
In commenting about this industry I feel what I felt when I was Chairman of the Select Committee on the Nationalised Industries and was reporting on it. The vastness of the industry gives me a sense of real humility in making any critical comment on the leaders of the industry who have such huge responsibilities. I say immediately my word of praise for their handling of the gigantic job they have in hand now, not only for running this huge industry, but of contriving to double its capacity in the current seven years up to 1970. The estimate in the Report of a capital expenditure for 1964–65 was £587 million, which is a gigantic sum to spend in new capital. The stresses and strains which must be involved at every level in this huge industry in doubling itself in seven years must be gigantic. I take my hat off to the leaders and all in the industry for their successful undertaking of this task.
I very much welcome the Minister's acknowledgement of the good record of the past 10 years. We occasionally hear from hon. Members opposite something about the last 13 years having been wasted, but the speech of the Minister was on a much better note and a more realistic one. This is one aspect of our

national life where very great progress has been made to the benefit of everyone during the period of our Government. I was delighted to hear the Minister paying tribute to it.
There are four points which the Select Committee commented on in its Report which I wish to comment upon. One is nuclear generation. As the hon. Member for Bristol, Central rightly said, the record on nuclear generation in the 'fifties on the whole caused more anxiety than satisfaction. The Magnox was a wonderful piece of engineering development, but its costs were by no means comparable with coal generation and the prospect was none too good. There had to be a cut back, and we all know the history. The success of the A.G.R. generator to be built at Dungeness is a tremendous venture and a magnificent achievement by all concerned. I am happy to add my congratulations to those which have been offered from all parts of the House. The actual costs of generation there, we are told, will be better than 10 per cent. cheaper than the cheapest coal generation. It is a very big advance indeed. It may well turn out in practice to be better.
I remember that at the time when we were reviewing the industry a couple of years ago when we completed our Report the issue was still very much in the balance with the Generating Board considering whether it would prefer to use the advanced gas-cooled reactor or a boiling-water reactor from America or Canada. It is of great satisfaction to know that the British invention has succeeded and will make such a valuable contribution for us. Any right hon. or hon. Member who has had the interest of inspecting one of these new nuclear generating stations will be lost in admiration at the ingenuity and the skill with which man has contrived to design and build these remarkable generating plants. It really is a great British achievement.
Turning to research, I was glad to hear from the Minister that expenditure on research has now gone up to £10 million per annum. This was a direction in which the Select Committee was somewhat critical, not of the Generating Board, whose research was good and appeared to be comprehensive, but particularly of the area boards, which seemed to have paid insufficient attention


to research in transmission and especially in distribution. Evidently, this is now going ahead fast, and I am sure that it will yield valuable results for the benefit of the whole community. Many tens of millions of pounds a year are being spent on distribution by the area boards, and it is clear that a great deal of research would be valuable.
I was pleased also to see the good progress which has been made in consumer research. The Select Committee was critical of the lack of market research in the consumer sector in the 1950s when the big expansion of space heating was going forward. This undoubtedly contributed substantially to the under-capacity of the industry which came to light in the cold winters of 1962 and 1963. Because the information was incomplete, because consumer trends were unknown, the forecasting apparatus, elaborate though it was, was improperly informed, and, therefore, the programme was insufficient to meet the growing demand. It is good news that this has now been overcome, that consumer research is going ahead on a comprehensive scale and that the Council and boards are now being kept fully informed of how consumption is going and what the likely developments will be.
I was glad to see that the tariff structure is again under review. I am sure that this is essential. We found that the tariff structure of the area boards was woefully old-fashioned when we made our review. They were still proceeding on the basis of the old-fashioned promotional tariff which worsened the peak rather than helped to even it out. This is a direction in which research pays valuable rewards in getting the best possible distribution of consumption over the 24 hours.
My third point concerns the financial target, which is still 12·4 per cent. The financial target laid down in 1961 by the Conservative Government in Command 1337 yielded no less than £70 million of what is called the balance towards the capital expenditure of the industry during 1963–64. This means that to that extent the taxpayer has to pay a lesser sum in finding the necessary below-the-line capital for the financing of the further expansion of the industry. In the year

under review—1963–64—it works out that the Treasury has to find £240 million and that the industry, from its depreciation and from its surplus, has to find £222 million, or nearly 50 per cent. What has been achieved—we see it coming out quite clearly—is what I regard as better balance in the huge capital expenditure for this industry between, on the one hand, the taxpayer who provides money through the Treasury and, on the other hand, the consumer who uses the electricity.
The fourth point to which I should like briefly to refer is one which worried the Select Committee very much concerning the relationship between the Generating Board and the manufacturers. Our worry was that the Generating Board was virtually the monopoly buyer for most of the big electricity generating equipment. There are only a handful of contractors who are still in the field supplying this very heavy gear. As the contracts are so big nowadays, ranging from anything from £5 million to £10 million or even £20 million, clearly, if any of the contractors, so to speak, misses his turn in getting a contract, he may well be in danger of being put out of business.
We were concerned that the relationships between the Generating Board and the contractors was not working too happily at that time. We recommended that an individual arbitrator should be appointed by the Government and should hold a fair balance between the two. The Generating Board insisted that competitive tendering was still the best method, and so it is in principle. When, however, the contracts are so enormous and when failure to get a fair share of the contracts can be calamitous for a firm, this was something in which it seemed to us that independent influence was needed.
I am glad to hear from unofficial sources, and this is confirmed, I think, by a comment in the Report, that the relationship has much improved in the last year or two since we made our comment. I hope that the Parliamentary Secretary will confirm this. It would be the best solution of all that there should be just a little more give and take between the Generating Board and the contractors, so that between them they could contrive to get a relationship in which there was


confidence on both sides, that the contractors were giving good value to the Generating Board and that the Generating Board was giving the contractors a fair crack of the whip.

Mr. Walter Harrison: If it was wrong for the contracting departments or the Generating Board to have the advantage in the first instance, surely it is equally wrong for the contractors to have an advantage as against the boards and the Generating Board. This is a position which applies at the present time.

Sir R. Nugent: I do not think that it does. This is a matter of balance between the two. It certainly is the duty of the Generating Board to see that it gets good value in the tenders which it receives and in the contracts which it makes for the equipment it buys.
On the other hand, it is for the Generating Board to see that these people can live. There are all too few of them now. We do not want them all to go out of business. Some of them at times, especially during the nuclear programme in the 1950s, bore heavy losses. My impression is that this situation has happily cleared and this is the best situation of all between good sense and good spirit on both sides. I hope that this will continue.
There are two further points on which I should like to comment and which go rather beyond the industry itself. One is the personnel and conditions of employment and the other is amenity, on which there has already been comment. The Report tells us of the negotiations that were opened by the Council of Europe to upgrade the manual workers to the status of salaried staff. There are some 130,000 manual workers in this industry and the Council set out in 1963 and 1964 to strike a bargain with the manual workers to bring them up to the basis of salaried staff. They made this upgrading subject to the acceptance by the unions of more efficient methods and patterns of working. Those negotiations broke down in March last year and a work-to-rule and an overtime ban were brought in. Most fortunately, it lasted for only a week.
The Minister of Labour came in quickly and set up a tribunal of inquiry, and in the event not too much damage

was suffered. But I should make the point in passing that no less than one-third of all generating capacity in the country was closed down as a result of this working to rule. Had it continued for more than a week, or had the climatic temperature gone lower at that time, the country would have been in very serious trouble indeed. In the event, the tribunal made a helpful report, negotiations were resumed and, as far as I know, successfully concluded. I should like the Parliamentary Secretary to say a word about this.

Mr. Palmer: Would the hon. Gentleman not agree that this is really the central argument for giving the manual workers staff conditions? This will give them a greater stake in the electricity supply industry and in its continuing prosperity and should reduce the possibility of friction.

Sir R. Nugent: Yes, indeed. This is a point which we on the Select Committee made in our Report, that these men carry such a heavy and vital responsibility to the whole community that they should be put on to a basis of payment and conditions of employment commensurate with the very heavy responsibility that they carry. I was personally much in favour of the Electricity Council's initiative, especially that of Sir Ronald Edwards himself, in doing this. I understand that the first stage of this new scheme of salary status was introduced in July of last year, and the second stage was introduced in February of this year. I hope the Parliamentary Secretary will be able to tell us how it is now progressing. Is all going well? Are the manual workers who are now on a salaried status responding and co-operating? I am glad to see that the Minister is now present.
The point is that this is a matter which goes beyond the industrial field where we can say to the industry "You get on with it and make the best deal that you can". This is something where the Government are bound to take an interest, whether it is the present Government or whether at some future time it is a Government from my party. The electricity supply is really the life blood of the country, not only in the home but in industry, transport, shops and offices. It is the supply of power on which we all depend. No Government can afford


to stand by and watch this supply imperilled. We have learned in the last two or three years how grave the situation can be. Because of that, I feel that right hon. and hon. Members opposite must have a direct interest in seeing these negotiations successfully concluded and a new basis established.
We really need a new form of relationship between this vast army of men and their employers, all of whom are working for the life of this country. I accept the point made by the hon. Member for Bristol, Central that this is a 24 hour service and that that it is not easy to arrange. I have already said that the first responsibility is, as always, with the management from the top to the bottom. There must be a form of management which will induce a sense of leadership and team spirit amongst these men throughout the industry. This is not so easy when we are dealing with about 130,000 people. But at the end of the day we must aim at a form of relationship under which these men who enter the service will make a contractual agreement whereby, in return for good pay, conditions and pensions, they will not withdraw their labour in any circumstances, that they will use the arbitration machinery which is set up to ensure that they will get fair treatment in the light of any claims which they may make at any time.
It really is intolerable today for the workers in this industry in the course of wage negotiations to be in the position to twist the arm of the public even to the extent of endangering life, quite apart from industry, in order to improve their bargaining position. These methods are barbarous and out of date, and I am sure that the vast majority of men and women who work in the industry do not like this. Therefore, it must be the concern of government, and especially of the present Government in view of the particularly favourable position of right hon. and hon. Members opposite in their special relationship with the trade unions, to make a real step forward which will be immensely for the benefit of the whole country. I would not say that any other country has arrangements which are much better than ours, but this is a relationship which must be worked out.
I am sure the people of this country will expect the Government to take a

lead in this matter. I ask the right hon. Gentleman to exert his utmost influence, which I know is considerable, with his right hon. Friends to see that this new salaried status is worked out on a contractual basis between employee and employer in this nationalised industry in order to give security of supply that everybody wants.
Now I come to the question of amenity. I accept the right hon. Gentleman's major point that the cost of under-grounding is prohibitive except in very special cases. I say straightaway that the Select Committee was impressed by the Generating Board's approach, and particularly Lord Hinton's approach in person. I am sure they were doing all they possibly could. The difficulty is that we all want further extensions of electricity supply and the only way to do this at present is by means of these vast overhead lines. The prospect that lies ahead by 1970 of a grid approximately 30 miles square consisting of these 400 kV transmission lines covering the whole area, on pylons 150 ft. to 200 ft. high is really alarming. When the country realises that this is what we have in store for them, they will rise up and look to the Government of the day, and to the Government of tomorrow as well, and say, "We really cannot take this". It will mean that wherever one stands in England's green and pleasant land we shall see these pylons galloping across the countryside. I do not entirely disagree with my hon. Friend the Member for Cirencester and Tewkesbury (Mr. Ridley) that they are fun—

Mr. Lubbock: So long as they are in somebody else's constituency.

Sir R. Nugent: Yes, and so long as we do not see too many of them. But they really do become intolerable. I press the point that transmission by direct current has a contribution to make. I was glad to hear confirmation of this fact from the expert mind of the hon. Member for Bristol, Central. This system is much more developed in other countries. It reduces problems of transmission and it would considerably reduce interference with amenity. It makes undergrounding less expensive. This is a method which we should push ahead fast.
The other point I wish to make is that which I made when I was perhaps slightly


out of order on the Gas (Borrowing Powers) Bill, that in working out a national fuel policy the Minister could make a contribution here if he would consider an acceleration of the gas expansion programme so that, as soon as it is practicable, gas carries a greater share of the heating load. Gas is extremely good for heating. It is competitive. It is sometimes cheaper and it has the enormous advantage that it can be put underground simply. There are none of these terrible problems of insulation. As the Minister knows, one 36-inch high pressure gas pipe put underground will carry the entire gas supply of the country.
Therefore, in terms of amenity, gas is surely the answer as far as we can introduce it to carry the heating load. I ask the right hon. Gentleman to give this very serious thought. Obviously it is not a development which can be carried out overnight but, looking ahead, if we can get the gas industry to carry a greater part of the heating load it would relieve the country to that extent of this very difficult problem of amenity which lies ahead. With these comments I should like to pay my respects to the electricity industry and to express my best wishes for its future.

6.21 p.m.

Mr. Walter Harrison: I do not intend to mince many words over the issues to which I should like to draw the attention of the House because I feel that my hon. Friend the Member for Bristol, Central (Mr. Palmer) and the right hon. Member for Guildford (Sir R. Nugent) have adequately covered in their eloquent speeches many of the matters which I had in mind.
I congratulate my right hon. Friend on an excellent Report although, as has been stated already, it is rather late. The Report is a credit to the success of a nationalised industry.

Mr. John H. Osborn: rose—

Mr. Harrison: No, I shall not give way. It is some time since I have addressed the House. I pay due respect to the House and I hope that hon. Members will not interrupt. The issues which I shall mention may be controversial and if it is intended to contest

each single one of them I shall be up and down like a jack-in-the-box.
It is my intention to bring before hon. Members two controversial issues. The success of this nationalised industry is the result of the success of the Labour Government in 1947 in nationalising it and it has been successful despite the fiscal policies of the previous Administration—and this, I imagine, would have been the subject of the intervention if I had given way a few moments ago. What has been achieved in this industry can also be achieved in another industry, which we intend to nationalise—steel. The attacks on this industry, directed at it in the early stages of nationalisation, are now being directed at the intention to nationalise steel, but in the next few years we shall have the same success in that industry.
We can be assured that with the nationalisation of our basic industries we shall have more than a 4 per cent. growth—a more progressive norm. The supply industry fits in with the economic structure of the nation. It is one of the key factors in our economy. It has a first-class relationship with the coalmining industry and I hope that that relationship will be maintained, despite the utterances of many hon. Members opposite who would throw the coal industry overboard overnight if that suited their vested interests. The electricity industry takes community considerations into account and I sincerely hope that the coal mining industry which has supported the nation for such a long time will be given proper recognition and for many years to come will play a useful part in solving the country's fuel and power problems.
The electricity industry is closely involved with other developing industries. It bears an important relationship to commerce, to civil engineering, to the consumer, to technical education and to the training of personnel. As I have said previously, this is the industry which has progress in its profile, but I now want to deal with the sour aspects concerning nationalisation. I feel that I should try to draw the attention of the House to one or two of the little subtleties which are creeping into the industry and which one could term as counterattacks on very progressive nationalised bodies.
I ask hon. Members to consider who meets the cost of training management in private enterprise. I put ten Written Questions to the Minister last Friday and the reply was that a terrific amount of money is allocated to the training of management in private enterprise by the Minister of Education and Science. I can go along with that, but at the same time I bear in mind the question of who bears the cost of training management and personnel within the supply industry. [Interruption.] Does the hon. Member for Sheffield, Hallam (Mr. John H. Osborn) wish to intervene? The nationalised industry bears the cost and these facts need careful consideration.

Mr. John H. Osborn: rose—

Mr. Harrison: The hon. Member has missed the boat.
If private enterprise can have the training of its personnel subsidised in this way then equally there should be the same possibilities for the training of management and personnel within the nationalised industries. There is a serious point here which I want to cultivate in answer to the right hon. Member for Guildford. I interjected during the course of his speech, but he did not answer me satisfactorily. I would point out to the right hon. Gentleman that the sinusoidal curve has undergone a complete change. At one time there was room for contracting within the industry, but the curve has now turned subtly in the opposite direction.
I have mentioned creeping nationalisation, but here we have creeping denationalisation, because private enterprise is gradually taking over the functions of the Central Electricity Generating Board and the area boards. I refer specifically to the contracting departments which the right hon. Member for Guildford mentioned. Work is being taken from these departments of the area boards and I would refer especially to the contracting departments of the London Electricity Board. It is generally acknowledged, as has been stated, that over the past five years there has been a terrific amount of capital development, with new generating plants and an enormous amount of new distribution. In 1964, a sum of £135 million was spent on new conventional power stations and

£88 million on nuclear power stations, making a total investment on new generating capacity of £223 million.
As the Report states, there was a marked acceleration in capital expenditure to reinforce and extend the main transmission systems to the tune of £76 million spent on new work alone. Yet, in spite of this, and contrary to what the right hon. Member for Guildford has said, the tendency of the contracting departments of the boards has been to do less and less a percentage of this type of work. It has been the deliberate objective of various boards to permit this work to go out to private contractors. The policy has been to sub-contract not only their own work, but to farm out contract work which they themselves have obtained within their contracting departments. In fact, it is now running at an average of over £100,000 a year.
Earlier this year, in reply to a Question to the Minister, I received the following Answer:
I am informed by the Central Electricity Generating Board that the value of contracts placed with private electrical contractors and with area electricity boards in these three years, for work on power stations under construction, was as follows"—[OFFICIAL REPORT, 19th March, 1965; Vol. 708, c. 339.]
and then come these figures. In 1962, for private contractors £1,100,000; for the boards £133,000. In 1963, for private contractors £764,900; for the boards, £71,000. In 1964, for private contractors £1,346,500; for the boards, £186,500. These figures prove that the cycle has gone right round. It is a sure indication of where the lion's share of contracting work is going, and, incidentally, this is only on power stations, not on other capital works.
On one of the £65 million power stations at present under construction, the local area board did not receive a pennyworth of work in the entire contract, but men from the local contracting department of the electricity board were being recruited and regularly employed by the private contractors working on the site, although the actual work should have been the electricity board contracting department's work.

Sir R. Nugent: May I interject? The contractors I was talking about were the contractors who do the capital works principally for the Generating Board.


Inevitably, they are private enterprise. The Board does not do it itself. The contractors the hon. Gentleman is talking about are the contractors who do private work. Sometimes area boards do some of this contracting themselves, and some of it is done by private contractors. It is a completely different field, and I was making no comment about that whatever.

Mr. Harrison: The right hon. Gentleman spoke of contractors. I have given the figures which prove the point. I accept from the right hon. Gentleman that, when he spoke of contractors, he meant building contractors. My point regarding electrical contracting must be accepted. I take it that right hon. and hon. Members opposite accept that my figures are correct regarding the swing-over on electrical contracts. It is proved, and the present policy is turning out to be a very bad one. What should be the electricity boards' work and the Central Electricity Generating Board's work is gradually and subtly taken over by private contractors.
I refer specificially to the contracting section of the London Electricity Board. Here, the facts are devastating. For many years, there was a special department which dealt with power station construction. In 1948, after vesting date, a summary of principles governing the conduct of electrical contracting and retailing was agreed and accepted by all area boards and by the electrical contractors' association, and the Authority's opinion on that occasion was that there should be no restrictions on the contracting activities of the electricity boards as it believed that this principle would be beneficial both to the boards and to the contractors.
As I said earlier, I have accepted this principle all along. The Herbert Committee was set up—there has been reference to this today—and it recommended as highly desirable that the customer should be able to turn to alternative sources of tender if he thought that either the board or the private contractor was charging excessive prices or offering inadequate service, and this was especially so if the customer happened to be the electricity board itself.
To cut a long story short, the London special contracting department was

organised on those lines. Over the years, it worked on about 40 different power stations and, into the bargain, achieved a direct net profit of over £500,000. In 1962, it was working on 14 power stations and had about eight other major contracts in hand. Then came the change in policy. Power station contracts are now left to private contractors. In the London contracting department alone there was a decrease in manpower—the figures have been given by the Minister in answer to my questions—of 555 men from 1962 to 1964. The majority of them are now working for private contractors doing what should be the board's own work. Their training was undertaken and paid for by the Authority. The value of contracting work in progress by that particular department has decreased from £927,000 to £384,000 in the same period. In this respect "contraction" is the appropriate word.
This policy is detrimental to the public interest, and I hope that, in the development of fuel and power policy, the Minister will introduce more competitive public enterprise so that this progressive industry may be made all the more successful.

6.36 p.m.

Mr. John H. Osborn: I add my tribute to the work done by the electricity boards and the Electricity Council, and I congratulate them on the success they have achieved. I say this as a Conservative, in spite of the remarks of the hon. Member for Wakefield (Mr. Walter Harrison). As a Conservative Member of Parliament, I was in the United States of America, just before publication of these Reports, outlining the virtues of nationalised electricity and pointing out some of the advantages as well as the disadvantages. When I spoke to an American audience, I tried to be objective.
My first point, appropriately, perhaps, a political one coming from a Conservative Member of Parliament, is that, if I, as a Conservative, appear not oppose nationalisation in the context of this debate only, it must not be thought that I support any extension of it. I say this because our debate today is the focal point or the fulcrum of democratic control of one of the biggest monopolies in the country. Admittedly, it is a State monopoly, but it


is a monopoly subject to control by Parliament under the original Act and the subsequent amending Acts. If I understand the Minister aright, the industry has capital assets to the value of over £3,000 million and we are talking in terms of capital assets of £7,000 million in the next ten years.
We are debating the Reports and Accounts for the year ended 31st March, 1964, and the intervention I sought to make in the speech of the hon. Member for Wakefield was to inquire which Minister he was congratulating. The Reports were published when a Conservative Minister of Power was in office, so I add my congratulations to him, too.

Mr. Walter Harrison: rose—

Mr. Osborn: The hon. Gentleman was very reluctant to let me interrupt him, but we on this side will welcome interventions.

Mr. Harrison: Was it a Labour or Conservative Minister of Fuel and Power who instituted the nationalised industry in 1947?

Mr. Osborn: I have given way, and the result is to bring political controversy into a debate which I had hoped would have little such controversy.
We have as supporting information the Report of the Select Committee dated 28th May, 1963, and the Observations on it dated 21st January, 1964. The country should know that the information made available to Members of Parliament particularly as a result of the work of the Select Committee covers three volumes and runs into thousands of pages. That is the reading matter which we as Members of Parliament have to digest. The board of any company would find so much reading matter too extensive to form the basis of a clear judgment.

Mr. Walter Harrison: rose—

Mr. Osborn: The hon. Gentleman must allow me to continue. I welcome the opportunity provided by a debate such as this for a Minister to give us a review of, in this case, the electricity industry.
I will continue with a personal observation. I have tried to assess by what authority I can intervene in this debate. I have bought electricity for industrial

purposes. I have set up a factory, and this has required close collaboration with the local electricity boards. I have been on various committees of industrialists who have been very much concerned with the difficulties of supply and adaptation of their equipment to electricity. However, I do not as yet claim to be an expert on the industry. We all have interests of various types, including constituency interests. One of the difficulties facing us in Parliament now is probably the lack of the expertise necessary to interpret this information.
There are many ways by which outsiders can influence an industry. The private sector has been spoken of. The private sector can be influenced by shareholders. It might be said that there is 3 per cent. electricity stock. What influence can the holders of that stock have on the conduct of an electricity board? I repeat what I said in the debate on the gas industry. Members of Parliament are trustees for the taxpayer, but we have only a limited chance of challenging the Executive, whether it be the Minister or the bodies which have been built up under him, and whether the Minister be a Conservative, or whether, as in this case, he be a Socialist. One of the difficulties we have in Parliament is to find the equipment and the information with which to challenge the Executive on occasions such as this, and challenge it constructively and not necessarily destructively.
What could have gone wrong in this case? It could be my own fault, but it was not until the business of the House was announced last Thursday that I knew that we would definitely have a debate on electricity supply before the House went into recess. This is part of the parliamentary system. I see the Minister nodding. It would appear that he was in the same position as I was.

Mr. Frederick Lee: The hon. Gentleman is right in saying that I was in the same position. Today we debate one of the nationalised industries. It was for the Opposition to take the initiative in determining which industry we should debate. Very properly, they chose electricity.

Mr. Osborn: I thank the right hon. Gentleman. I was not saying that critically.
Many organisations outside the House, particularly trade associations and perhaps some chambers of commerce and industrial associations, have very strong interests in electricity supply and have made private approaches to the Ministry. They had no definite knowledge that there would be a debate today. Many of those who over the last few months, have expressed views to me as a Member of Parliament representing a Sheffield constituency would have liked me to deploy a much more forceful case, but they have to have time in which to collect the information. I am not criticising the Minister; I hope that he understands that.
Many people who have very strong views would wish to make them privately to the Minister, or, if not directly to him, to his civil servants, rather than ask a Member of Parliament to do this. This is a feature of the new political-industrial organisation which is very relevant in the case of the nationalised industries. Many trade associations and individual companies take this view, probably rightly so0—I am certain that if I wanted to deal with many of these issues I would not necessarily want to have them debated in Parliament. Industrialists and others with problems go, quite rightly, direct to the chairmen of area boards and to the other two chairmen, Sir Ronald Edwards and Mr. F. H. S. Brown.
I am aware of those problems. It is of interest that I have been specifically asked not to raise them in the House of Commons at present. This is because of a fear on the part of those outside that the normal negotiations would be prejudiced rather than helped by the fact of my raising the issues. I mention this only because it is a feature of the new relationship between industry, the boards which have been established and Parliament.
I must explain this a little further. The Central Electricity Generating Board is both a customer of and a supplier to large sections of industry. My right hon. Friend the Member for Guildford (Sir R. Nugent) pointed out that the purchasing power of a nationalised monopoly commands a great deal of respect. This is a feature of nationalisation which could have undesirable aspects. I do not say that the power is being abused in this case, but the person who has to supply dare not endanger his chance of gaining further

orders by raising matters in a public forum such as this. It can be said that area boards have developed their own relationship both as suppliers and as customers with British industry.
The exponents of nationalisation are also exponents of the virtues of parliamentary control. Do they consider that the present system of Parliamentary control is adequate? Are they satisfied that Parliament has enough influence on the Executive? I should have been happier if, prior to this debate, the Select Committee could have given us a more up-to-date Report than that which we now have. I raise this point because there are hon. Members opposite and, I stress, on this side, too, who have been talking about the reform of Parliament. This is an aspect of Parliamentary activity which should be considered.
My first principal point is the relationship between the industrial user, the domestic user and the electricity industry. I shall not pass comment on the extent to which the costs of production are too high and that there have been recent increases in tariffs. Does a nationalised industry of this size make the best use of its manpower, in spite of the increase in productivity to which the Minister has referred? Paragraph 175 of the Report of the Electricity Council shows that the managerial increment has increased by 3·4 per cent., the technical engineering increment by 7·1 per cent., and total manpower by 2·2 per cent. What yardsticks are there by which we can ensure that we are getting the increase in productivity which we should be getting? What can we in the House do to question this?
I want now to make points concerning South Yorkshire and the Yorkshire Electricity Board. The board points out in its Report that in the last year costs have risen from 1·034d. per unit sold to 1·072d. and that the cost including distribution has risen from 1·412d. per unit sold to 1·445d. The table shows that of the approximately 356 million units sold 94 million were for domestic consumers. The rest went to farms, commercial users and others.
As the hon. Members for Leeds, North-West (Sir D. Kaberry) and for Sheffield, Brightside (Mr. Winterbottom) in debates in the House, have pointed out, there is concern in industrial areas such as Sheffield and South Yorkshire. There has


been an increase in tariff in Yorkshire. Industry there is of the view that it has had to bear more severe rises than has industry in other areas.
Increased electricity charges mean increased costs of production in our factories, and I have been very interested in the discussion we have had on transmission and transmission economy. I think that the greatest economy we could have would be less transmission and more generation near to the site at which the electricity is to be used. But what evidence have we—I notice that there is a £5 million subsidy for rural distribution—that industry is not paying for these extra transmission costs—costs which it ought not to be paying, and, for that matter, what evidence have we that industry in the North and in the Midlands near the coalfields is not paying for transmission costs elsewhere?
I have had the word "postalisation" used to me—that is, averaging, similar to a flat letter rate. In other words, is there a policy of averaging between the Generating Board and the area boards which means that industries near the coalfields are paying heavier charges than they should? If this is so it can distort costs. Under Section 14 of the 1957 Act which relates to Section 37 of the principal Act there comes the whole question of tariffs and the special agreements. In Sheffield the predominant industry is steel. Naturally, electric furnaces are used extensively. One essential for predicting costs of production is stable electricity prices, and the recent increases in Yorkshire, and elsewhere for that matter, have faced the steel industry with immense burdens.
The problem many companies have to face is that under the new special agreement there is both a firm load and a disposable load. The disposable load, I gather, under certain agreements can be charged at as low as half price, but if any of these tariffs and the length of time power can be switched off are being revised it means that long-term estimates of costs can be false. This is but one more instance of a burden which private industry has to bear because of the powers which reside in an authority such as the Council and Board. This point of view has been put to me on various occasions. It has been raised with consultative councils and I would

like this matter to be looked at again by the Select Committee and others. It could well be that industrial representation on the area boards does not carry sufficient weight. Is the Select Committee satisfied that industry—a vital user—has sufficient representation locally and nationally?
The second point I want to make has already been touched on, and that is atomic power for electricity generation. We welcome the fact that atomic energy is now the cheapest source of generating electricity at present. Within the last few months we have had definite confirmation of this break-through. What does interest me, particularly as Members of the House have had a chance of visiting the French project at Rance, is that the costs of electricity generated from nuclear energy can be compared to the best hydro-electric and tidal generating stations. These are international comparisons, but I understand from our French hosts that they believe that hydro-electric generation, particularly in their own project, would still be competitive with the best thermal and nuclear stations.
I welcome the announcement the Minister has made that the 5,000 megawatt programme, referred to in the recent White Paper of last year is liable to be increased. I welcome the two publications we have had from the Generating Board about the costs of nuclear electricity generation, and I also welcome the fact that these costs of generation are 25 per cent. lower than the costs of the Magnox type and 10 per cent. lower than the conventional type power station. Table II, on page 15 of the Report, shows that, dependent on the load factor, the costs of electricity generated by the advanced gas-cooled reactor power station are between 0·457d. and 0·577d. per kWh.
I have had drawn to my attention an article in the Daily Telegraph by Mr. Martin Burn, who quotes figures for the boiling water reactor at Oyster Creek of 0·31d. and possibly as low as 0·29d. per kWh. It is suggested that whereas we have a capital cost of £92 per kW at present, current American atomic power capital costs are as low as £63 and at Oyster Creek as low as £30 per kW. We have the Generating Board's evidence, which I welcome, of course, and I think it is right, even if the benefit


is marginal, that as we have British "know-how" and technique, that in this instance it should be used in the form of the A.G.R. atomic power station.

Mr. Lubbock: As to the £92 per kW the hon. Member is quoting, is not that the cost of the Wylfa Station? Because A.G.R. is much lower in cost.

Mr. Osborn: No. Martin Burn quotes these figures of capital cost per kW in America. The Dungeness nuclear station, according to the C.E.G.B. appraisal, is quoted at £92. This is the figure I have used in this argument.
I would say that there is a very good case for asking the Minister, the C.E.G.B. and the Atomic Energy Authority to carry out a survey and research on variety of B.W. and P.W. reactors, and I hope he will approach the Minister of Technology about this. What study are we giving to the virtues of a boiling water and similar types of reactor for smaller power stations, bearing in mind that one of the big issues we have been discussing today is the cost of transmission? If by putting in boiling water or similar type power station reactor nearer to the site of usage we could cut some of our other costs this would be an advantage. If there is not a cost advantage, there could be an amenity advantage.
We in this House have not sufficient information to decide the advantages and disadvantages of each type of reactor, but I hope that when the Minister looks into this further he will consult the Generating Board and the Minister of Technology so that we can have a survey of the merits of the other type of reactors. But I welcome the fact that at the present time a decision has been reached. I do not wish to dispute that decision. The next immediate progress forward will be on ground which is firm, and I would not wish to go back on it.
It had been my intention to make but a few observations. I welcome the information the Minister has given us, and the chance not only of contributing towards the debate, but of learning from others what is going on in this complex but exciting field.

6.59 p.m.

Mr. Richard Wood: My hon. Friend the Member for Sheffield, Hallam (Mr. J. H. Osborn) has just been very modest about his so-called lack of

expertise, but drawing freely on his business experience, and on his own researches, and evident very hard work, he has made a speech which we have all listened to, I think, with great interest and, I hope, profit.
I should like to follow him in one comment he made about the timing of this debate. It seems to me that the Government, with their unerring sense of occasion, have fixed this debate on the electricity supply industry, whose products and fortunes, after all, affect almost every single person in the land, on a day when, perhaps understandably, a good many hon. Members seem to have decided to desert this place for more congenial surroundings. The Government following the example of other Governments—in my view, the bad example of other Governments—continue what seems to be the general practice, that we discuss electricity in the high summer rather than in the possibly more suitable chill of December or January.
On this occasion, moreover, as has been pointed out several times, we are, formally at least, debating a Report, a little absurdly in this case, which discusses the industry's operations not under this Government but under the previous Government. But at least that fact may have the effect of producing a rather more cheerful debate than the debates which the Government have had to face during the last eight days. At any rate, 4th August is the anniversary of our going into the First World War. It seems very peaceful today, and I dare say it will remain so. I doubt whether I shall disturb the peace very much. But I would like to make a few remarks, and perhaps one or two of them will be a little more controversial than is my usual style.
At the beginning of the last Parliament, when I first became closely associated with the nationalised fuel and power industries, it seemed very evident that of all the nationalised industries, not only the fuel and power industries, electricity appeared to be very much the favourite son. But its natural advantages of cleanliness, easy availability and its monopoly in certain fields of use have thrown into relief the very real problems that face the industry today and are likely to face it increasingly in the future. These natural advantages that I have mentioned—and there are many others—have created not only an


immense demand, as we all realise, but a demand which has been increasing at an accelerating rate.
In 1959, the demand for electricity in Great Britain, I was reliably informed in that year, was thought likely to double within the following decade. But today, only six years later, the demand is likely to double long before 1975, and it is for me at least a very imposing thought that all the generating stations, great and small, which were built before the end of 1963 represent less than half the total capacity that is planned to be available in five years time.
I remember a year or two ago paying a visit to the B station at Ferrybridge and looking out of the window there at the C station, which was then merely ground with bulldozers and earth-moving equipment on it. At that time, the B station had only just been completed, but I was told that the C station was going to be seven times the capacity of the B station. At High Marnham, near Newark, there is a fine monster of the early 1960s which will be completely dwarfed in terms of capacity by the growing stations on the Trent and in the south of my own county of Yorkshire.
This vast total capacity is necessary for that fateful hour, sometimes in December and sometimes in January, of peak annual demand. A few years ago, the public made perfectly clear its wish to be reasonably insured that, during periods of super-peak demand such as we had in that very cold winter a year or two ago, electricity supplies would not fail. In reply, I made it equally clear that the expense of such insurance was certain to be massive, and so it has proved. An investment which is running at the rate, next year, of £650 million to provide a generating capacity in 1970 of 66,000 megawatts is the cost of the premium which must be found in one way or another by the nation if it is going to obtain a reasonable cover against an interruption of supply.
I come now to a point which was rightly raised by my hon. Friend the Member for Cirencester and Tewkesbury (Mr. Ridley). The size of the capacity to be provided must depend largely on the estimates that the Government have made of the economy's future growth. As my hon. Friend pointed out, the Electricity

Council is already providing for a margin of something like 18 per cent. If growth under the present Government becomes stagnation—I believe that was the favourite word of the right hon. and hon. Gentlemen opposite a few months ago—and the margin of capacity over demand consequently swells considerably, as it would, over the comfortable margin of 18 per cent., surely the people of this country will rightly complain that the Government have done nothing else than extract from them an extortionate premium on a fraudulent prospectus.
I am bound to admit that I feel very uneasy. My uneasiness is partly relieved by the knowledge, which a good many of us share, that the industry is in the hands of men for whom I myself have not only great admiration and great respect but also great affection. I speak of Sir Ronald Edwards, Mr. Stanley Brown and others, and in this context I would not like to forget the name of Lord Hinton, with whom I worked very closely and who has recently retired from the industry. I have no doubts about their capacity and ability but it is obviously essential that they work closely with the forecasts and expectations of Her Majesty's advisers pro tem. I believe that the full phrase is pro tempore. I hope that it is pro breve tempore. If the estimates of these advisers turn out to be wholly false, then the full blame will rest on the Government and not on the leaders of the industry.
It was a common jibe of the Socialists when my party was in office that we could not make a success of the nationalised industries because we were ideologically opposed to nationalisation. That illustrated the narrow, doctrinaire approach which, I am sorry to say, the present Government have continued to follow during the last miserable 10 months. A large section of the party opposite continues to put its party doctrines far higher that the needs of the nation. I never cease to be thankful that it was the Conservative Party which first set precise standards of performance for the nationalised industries, and I believe that the White Paper of 1962 was the most important single step forward in the relationship between those industries and the public.
I would like to give the Government the credit for supporting now the White Paper


policy, whatever some of its wilder adherents may have said when the White Paper was first produced. But I do not believe that the present Government would ever have produced such a White Paper. If the White Paper had not been produced and the nationalised industries had not got their obligations set under it, the burden on the taxpayer caused by the present massive investment would now have reached astronomical proportions. Obviously one thing that the White Paper made necessary was for the electricity industry and the other nationalised industries to find a greater proportion of the money that they needed for their future development out of their own revenue. That in itself provided an incentive, which I am certain the industry warmly welcomes, to force down both the cost of capital development and the cost of producing electricity.
Over the years, the industry has been remarkably successful in reducing its costs, as the right hon. Gentleman the Minister pointed out earlier this afternoon. I am glad to say that that incentive still exists, but again I am beset by doubts as to the policies that the Government may possibly press upon the industry, which may make it impossible for the industry to go on forcing down its costs of production in the way that its leaders would like.
The search throughout the last decade for competitive nuclear energy has obviously played an important part in that cost reduction. Over a number of years it had an astonishing effect on the costs of conventional generation, and with the advanced gas-cooled reactor, as my hon. Friend the Member for Sheffield, Hallam pointed out, it seems to me that a breakthrough of the competitive ability of nuclear power is likely to be achieved. Important though this is—and I think that perhaps a number of people attach too great an importance to it—it is wholly wrong to exaggerate the effects and the immediate consequences of this breakthrough because it is clear—and the right hon. Gentleman made this point this afternoon—that electricity generation will continue to be overwhelmingly conventional and predominantly coal-fired for a good many years to come.
In my opinion the developments which may change the whole face of electricity supply throughout the world are still in

their infancy. The hon. Gentleman is much more technically qualified than I am to describe them, but looking at all that has happened during the first 65 years of this century, including perhaps even the "13 wasted years" since 1951, it would be a bold man who would predict that in the year 2000 we would still be thinking in conventional, or even in nuclear, terms. These, however, are the terms in which we must think for the immediate future, and some of the problems which they pose are formidable. The number, size and siting of power stations and the provision of adequate transmission alone will give the present Minister of Power and his successors quite enough to go on with.
The other night the Secretary of State for Education and Science used some brave words about the despoliation of the countryside. That was when he was doing his best to spin out the debate until Big Ben mercifully struck.

Mr. Eric Lubbock: He spoke of the coastline.

Mr. Wood: The right hon. Gentleman was no doubt drawing our attention to the whole question of the despoliation of the countryside, and when I was Minister it was frequently represented to me that the pylons were not an addition to the beauties of the countryside but, as my right hon. Friend the Member for Guildford (Sir R. Nugent) said, the Minister of Power and the electricity industry will find it physically more and more difficult to maintain necessary supplies in the face of the opposition with which most of us here have a good deal of sympathy unless they are rescued by technical developments both in the siting of power stations and in the means of moving electricity from the point of production to the consumer.
Nuclear developments, dry cooling towers and new methods of transmission, including cheaper underground transmission, might—and it is a big might—all come to our aid, but the difficulties, which are only too obvious, underline the essential need for research to continue. We have been told that this is a modernising Government. After the last 10 months some of us have our doubts, but we have been reassured by the right hon. Gentleman that this research is going to continue, and that


he fully recognises the importance of it. I hope that the right hon. Gentleman and his Parliamentary Secretary will not be content with mere words but will continue to give real encouragement to this industry to press on with research because without technological advances in this field their task and that of their successors and of the industry will become well nigh impossible.
The right hon. Gentleman can confidently count on our support for this industry which, I am convinced, as I think he is, is well led by men who are aware of its problems and who are determined to overcome them. I believe that the right hon. Gentleman shares these views, and he can, therefore, also count on our help in the relationship that exists between the Government and the industry. The Minister knows that this relationship is a peculiar one and can be delicate, occasionally perhaps difficult, but I can assure him that we shall continue to give him all our support as long as he continues to be guided only by the national interest in all his dealings with this great industry.

7.15 p.m.

Mr. Michael Alison: I rise to speak as one who has the prospect of having within his constituency three large coal-fired power stations. One of them is in operation, one is building, and the third is definitely projected. The first is at Ferrybridge, the one that is building is at Eggborough, and the one that is in prospect is at Drax. The last-named will be the largest power station in Western Europe, capable of producing 3,000 MW.
I therefore have a definite constituency interest, and it is perhaps right to begin by adding my praise to the electricity industry and to the C.E.G.B. for what they have achieved. They have made really solid progress in terms of the economic efficiency of the industry, particularly in relation to labour productivity, of which Sir Ronald Edwards made considerable play in his presidential address. What strikes me particularly is the 19 per cent. increase in thermal efficiency which has been achieved during the last decade. In a country which has pioneered the art of boiling water efficiently, this is quite dramatic.
There is a lot on which we can congratulate the Board and the Council, and we in this part of Yorkshire are proud of the fact that these sites have been chosen for these really stupendous power stations. It reflects credit on the buoyancy of Yorkshire industry, and also on the efficiency and profitability of the South Yorkshire Coalfields.

Mr. John Harvey: Does not my hon. Friend regard it as remarkable that while we on this side of the House are saying these deservedly nice things about this efficient industry, this exhausted Government cannot rally one back-bencher on their side to participate in the debate?

Mr. Alison: It certainly is shameful, and I am particularly depressed that so few Yorkshire Members are present. After those few introductory words of congratulation, I should now like to give the House a worm's eye view of the impact of the operations of the Board rather than the bird's eye view we have had this afternoon. I wish to draw attention to the economic difficulties which arise locally—and to some extent nationally—from the scale and method of developing these big new power stations.
I propose to start at the local level because it is relatively easy to pinpoint the impact on a town of the construction of these power stations. Near Selby, and within sight of the centre of the town, we have the cooling towers of the power station at Eggborough, and before long we expect to be able to see the cooling towers at Drax. The basic problem locally is the obvious one of the shortage of labour. Unemployment in my constituency is running at about 0·7 per cent., which is half the national average. This means that the labour situation, already tight, has to digest the impact of the sudden arrival of these colossal power station projects, involving during the constructional period the employment of huge labour forces which fade away when the operation stage is reached.
In the case of Eggbrough we face a demand for about 2,500 constructional workers at the peak, and in Drax a demand for about 5,000 workers. This is sufficient in theory to absorb the total working population of the whole of Selby, taking every man out of his present commercial or industrial activity. The real


rub is that the earning opportunities provided by the construction of these power stations are already proving sufficient to have the effect of drawing off large parts of the working population of the town. In much the same way as the children followed the Pied Piper workers leave to work on these huge projects some miles away. Of course we all know that the actual situation is not quite as stark as I have painted it, because construction is phased and it does not all happen at once. Furthermore, the contractors usually carry round some of their own men, who move from one power station construction site to another, and in that respect there is not so great a great drain on the local labour force.
But the position is still a very severe one locally, and I hope the Minister will consider the way in which it affects some local firms. One long-established chemical firm in Selby, which is extremely efficient and is seeking to expand, has found that one in eight of its labour force has left in the last few months to work either at Ferrybridge or at Eggbrough. Further, a small shipbuilding firm with a large export order business working on the Yorkshire Ouse has had its labour force of about 300 men reduced to 250 in twelve months, entirely by removals to power station sites. If this were to go on indefinitely that firm would hardly be able to carry on.
All this arises from the special power of these huge C.E.G.B. constructional contracts to attract labour by reason of their earning opportunities. The point is not that the power station contractors pay higher hourly rates, because those rates, by national agreement, are precisely the same as those paid by local firms. The attraction is the almost unlimited overtime facilities. Apparently men will almost kill themselves to carry away overtime earnings rising sometimes to £50 a week. Less satisfactory, because there is no commensurate increase in production, are the hidden bonuses given by contractors to persuade men to come and to stay. Lodging allowances are paid to local people who do not need them. Free tickets are given to workers so that they can see their great aunts in Windermere, and that sort of thing.
These perks create what we know as a wage drift, which is really an increase in wage rates unaccompanied by any

increase in production. This, writ large, is the disease which affects two-thirds of the country. That is what goes on locally. Wage earners are drawn away by the auction procedure. The C.E.G.B. is in a very strong position, because of the scale of its contracts, to make bids favourable to itself. Of course the argument can be put forward that this is a beneficial process, that, because it is an economically important project, a power station should have the rights to divert factors of production to what might be considered more productive employment.
Yet I cannot believe that the local power station projects that we have in this part of the West Riding have established so overwhelming an economic priority that they justify the complete dislocation of the current activities of local firms. The problem is aggravated by the fact that the men who go to these power station projects work an extraordinary amount of overtime, which in itself cannot be a good thing for the whole tone of employment in the locality. The snag is that this employment comes to an end in anything from three to five years. The men are than thrown back on the heap. By that time they have lost their original jobs; indeed, the firms that employed them may have been forced out of business.
In this sort of situation I hope that the Minister will consider taking action. I suggest that he should undertake to give directions, as he has power to do, to the C.E.G.B. to ensure that it gives much greater thought to the impact of its operations upon local economies. In this connection I want to make two specific suggestions. First, I suggest that contractors for the C.E.G.B. should be required to recruit a certain percentage of their labour force from outside the locality of their immediate operations. This is quite a reasonable request, because there are certain parts of the country where unemployment is high and where people are looking for work. Under the Ministry of Labour resettlement transfer scheme financial and other incentives for recruiting labour from outside the immediate area of operations are provided.
My second suggestion is that C.E.G.B. contractors should be forced to notify their vacancies to the local labour


exchange; indeed, if possible local labour exchange representatives should have sites representatives so that they can ensure that recruitment is not done "on the nod" by the foreman—because this is where the process of poaching really gets under way. There should not only be recruitment from outside the locality but a definite application to the local labour exchange for labour, with a labour exchange representative on site, if possible.
The Minister should also seriously consider consulting his right hon. Friends the Minister of Housing and Local Government and the Minister of Labour about the impact on housing amenities in this area, where we shall have a large influx of labour. At the peak, we shall have 5,000 workers on site at Drax, which is about half the present population of Selby. Selby is fortunate in one respect but unfortunate in another, in that most of its women go out to work and there is no question of finding casual lodgings in the town. If 5,000 men are going to live on site they will have to find somewhere to live.
I should like to know what thought has been given to this question in respect of one of the projects which I have mentioned. I hope that the Minister will consider the necessity for a rational preparation of the ground for the launching of these huge unprecedented power station constructional projects like that at Drax. I make these local points because they are specific examples of the numerous ways in which the country's overall economic difficulties spring from a series of little local situations where pressures on the supply of labour are very severe. They produce a bidding up of wages without any commensurate increase in production. This is at the root of our inflationary difficulties, and it does damage to our exports into the bargain, because of the dislocation it brings to other, smaller firms.
I want to say a word about the overall operations of the C.E.G.B., especially in relation to capital expenditure. The Minister was very impressive when he referred to the heavy burden that the C.E.G.B. has to bear in respect of capital investment, and the reason why it has to bear it. Many hon. Members have referred to what Sir Ronald Edwards said

in his presidential address at Brighton. He said quite plainly that the Electricity Council would have to borrow £400 million this year alone in England and Wales, quite apart from what it raises internally—about which the Minister has already spoken.
This is a staggering sum to borrow. Not only that; it is a staggering increase compared with its net borrowing from the Exchequer last year. Last year it borrowed £317 million from the Exchequer, so the £400 million for this year represents almost a 33 per cent increase. It is worth reminding the House that the Chancellor quite plainly stated the other day:
The Government has decided that the growth of public expenditure between 1964–65 and 1969–70 wil be related to the prospective increase in national production. In the Government's present judgment this means limiting the overall increase in public sector expenditure excluding the investment of the nationalised industries, and taking one year with another, to 4¼ per cent. a year at constant prices."—[OFFICAL. REPORT, 6th April, 1965; Vol. 710, c. 279]
In view of a 33 per cent. increase in the borrowing of the C.E.G.B. this year it is quite reasonable to ask where the Board will borrow the money from. Where will they get this extra £400 million? If one looks at this year's Budget Financial Statement, one discovers the sad and sorry but true fact that Government financial credit has gone. Indeed it is not just Labour Government credit: it is, alas, the previous Government's credit as well. In recent years, the Exchequer has had to pay back to the public more than it has been able to borrow from them.
If one looks at the Exchequer borrowing for 1964–65, it is striking that they had to pay back twice as much on repaving outstanding loans as they were able to borrow afresh from the public. They made up the total by a form of raising funds which was either "once-and-for-all" or was directly inflationary. In 1964–65, they managed to get by with their borrowing either by drawing on the I.M.F. interest-free notes or by dipping into the Exchequer equalisation grant, for which there was a good deal of sterling, resulting from the disposal of foreign currency—that is the once-and-for-all method—or they did it by increasing the floating debt by issuing Treasury Bills,


that is, by creating credit, which is directly inflationary.
What will they do this year, with this huge C.E.G.B. borrowing requirement? Unless some very hard thinking is done by the Minister and his colleagues, we shall continue financing C.E.G.B. operations and other capital projects by the old process of depreciating the currency, creating credit and raising prices. How will the Chancellor's measures bite, on the Minister's Department or on the economy at large? And can the Minister give some specific answers to the local questions which I have raised?

7.31 p.m.

Mr. R. W. Brown: I rise in answer to the challenge of hon. Gentlemen opposite. I am sorry that the hon. Member for Waltham-stow, East (Mr. John Harvey) has chosen to leave the Chamber after he made a silly and childish remark, when he might have heard the rest of the debate. I have sat through the debate and listened to hon. Gentlemen opposite with some interest. It was not very long ago that they were denigrating nationalised industries. We saw posters saying, "No more nationalisation"—

Mr. Patrick Jenkin: Hear, hear.

Mr. Brown: The hon. Member says, "Hear, hear". He will learn that this sort of thing is what it is all about. I was delighted to hear hon. Gentlemen opposite got arguing the case against the nationalised industries, but squeezing out for it every possible piece of praise and plaudit which they could. I should have preferred to listen to this rather than contribute to the debate.
We have before us today a first-class report of an industry which has shown itself dynamic. It has shown that it is seized of the importance of providing the best possible service to the people at the best possible price it can. This has not always been the attitude of hon. Gentlemen opposite, during the past year. Prices of electricity have had to go up to keep in step with rising prices. One of the things which I liked about the Report, and which brought home to me some memories, was the reference on page 39 to the thermal efficiency of generation in the conventional steam station. It was,

at one time, my job to look after the thermal efficiency and to see that we got it as high as we could. I know the problems especially that of overloading. I read paragraph 97 with some quizzical thinking, in the sense that it says that the increase in average thermal efficiency was not as high in 1963–64 as they would have liked, because of the problems of the machinery, which had been overloaded the previous year.
I hope that hon. Members will understand that this is a serious point. It affects the efficiency of the stations considerably. When I was responsible for efficiency in the stations, it went up eventually to 19·5. When I looked at this figure of 26·7, I was reminded that my station was only a booster station, that is, that we had to bank down after the peak period and we came into peak working in the peak periods, from 7.30 to 9.30 a.m. and from 4.30 to 6 p.m.
The need for research co-ordination in the industry is brought out very clearly, as is the fact that this is an industry which was faced with changing stresses. It had to look to the future and the problems of what rôle atomic energy would play. I recall being at an institution meeting where we had a graph drawn forecasting where atomic energy would play its rôle in 1972 and it was a larger part of the cake than has actually happened. One hon. Member opposite referred to the building costs and the problems of building these stations. I have always felt that one of the reasons why the atomic energy stations have cost so much is because of these outside factors, which are not necessarily the developing costs of the installation itself.
I was pleased to see the five factors which the industry had been looking after in order to try to improve their transmission, generation, and distribution techniques. It seems to me that the Report has highlighted the most important factors. As one reads on, one sees the tremendous attempt they are making to grapple with the problem and face the future, when atomic energy will undoubtedly become an important part of the electricity industry. This brings us much greater problems than just the development of the reactor. It has an effect on the whole station itself, even down to the safety measures, which will vary considerably from the safety


measures which have to be observed in the traditional steam stations.
They indicate that they are on top of the job and are seeing that, by the 1970s, they will be in the front rank of providing us with a service of electricity in accordance with the desire of the nation, when, by that time, we hope we shall have an industry which can be geared up and making the maximum utilisation of electricity. One of the problems is that of peak loading. I was most impressed with the attempt which has been made by the electricity boards to encourage consumers to take their electricity on the new storage heater basis—to get it at a cheaper rate. This is important, if only we could get the people to understand the advantages which are there for them if they do this, and the help they could give to the station.
One hon. Member opposite referred to this very point. It is worth noting that they have to estimate the total capacity per installation and that they have very hazardous means of determining what their demand will be. This means that they err on the side of caution, and it costs that much more on each occasion that the peak demand is required.
I was interested to see that not only has the electricity industry been interested in its own research, in the sense of their technical research, but they are now showing a very real concern for the consumers and their needs. It has been argued from time to time that these monolithic bodies are out of touch with people and never really understand what the consumer wants.
On page 50 we can see the attempt of the industry to understand the needs of its consumers. The industry is using modern management aids to provide the best possible statistics on which to work. We see that the industry has geared itself up in this way, not always with the support of everyone in the country. It has forged ahead and is beginning to make the impact for which many of us hoped who had faith in the industry in the early days. I was delighted to see the results of some of this research into consumer needs and to see that it is showing advantages and being reflected in the work of the industry.
It is also remarkable that the industry should play an important part in international

activities—in the development of Europe and the industrial problems of the electricity industry throughout the world. I was employed in a private part of the industry and was not concerned with the Board, and I therefore need not declare an interest. But we have always believed that the industry could play an important rôle in international affairs, and I was pleased to read of the interest which is being taken in this respect.
The industry has also taken a noteworthy interest in education and training. For many years I have been involved in teaching engineering, and I have always complained that, generally, industry is not aware of the training facilities which are available in this country. In this report the electricity industry indicates that not only is it making full use of the services which are available but it is prepared to go into the training business itself to ensure that it gets staff of the calibre it needs. I did not understand one comment by an hon. Member opposite about an increase of 7·1 per cent. in the technical engineering grade. Was he complaining about that? The more one develops these techniques, the more one needs technical people to deal with them. I was pleased to see the wide range of courses which are being run.

Mr. Palmer: My hon. Friend makes a useful point. Perhaps he will also agree that there has been a corresponding fall, both absolutely as well as relatively, in the number of manual workers employed.

Mr. Brown: I thank my hon. Friend for that comment. It is a point which I was trying to make—that the industry has made itself efficient and is using these technical aids.
I was seized of the importance of the reference in paragraph 208 to careers development. This is a point which industry does not always understand. Industry complains that it cannot get executives and that it has no top men coming along, no captains of industry. It does not seem to understand that it is its responsibility to select its staff and to plan a career for executives so that people may see a future in the industry and may see themselves moving to jobs which are well within their capacity. Then we find happy employees working to their maximum efficiency. The return to industry clearly is very great. I am


very pleased that the electricity industry has introduced this system of careers development. In 10 years' time the reward for doing this will show clearly in the status of executives and top executives in the industry.
I do not want to detain the House too long, because there is not much that I can add to this outstanding Report. I am proud that the industry has been able to submit such a report. A headmaster would have written, "Well done".

Mr. Patrick Jenkin: Surely the hon. Member recognises that the whole of the period covered by the Report which he is praising so lavishly was under the auspices of a Conservative Minister.

Mr. Brown: What the hon. Member believes he said, I do not know. What we are talking about is the people in industry—the electricians, the technologists and the scientists. We are not talking about hon. Members opposite. They spent their time fighting the Finance Bill on the Corporation Tax and Capital Gains Tax. I am talking about those who dedicated themselves to an industry to give a supply to the country in the most efficient way and at the most efficient price. This has nothing to do with politics. Many of us on these benches have spent years trying to explain to hon. Members opposite that industry is industry and politics is politics. Time and again we have to ask them not to bedevil industry with silly political comments. The silly comment which the hon. Member made epitomised that very thing.
I hope that, having read the Report, we can say to the hon. Member that if he wants a little extra tutorial we will give him the help he needs to understand the Report. If we are to ask industry to gear itself up for the future of the country, we must ensure that industrialists, workers and management know that they will be allowed to get on with the job without being bedevilled by people who are guilty of political sniping and carping. When they have done a good job, let us have the courage to tell them so. Let us tell them, "Well done. We hope for more improvements, but we are thankful for what we have received. We look forward to an ever improving industry in the future."

7.47 p.m.

Mr. Eric Lubbock: The hon. Member for Shoreditch and Finsbury (Mr. R. W. Brown) must learn that because hon. Members on these benches—I am not entitled to speak for the Conservative Members present, although I think I may do so on this occasion—praise the electricity industry, they are not necessarily advocating further nationalisation. That would be a complete non sequitur and a confusion of thinking which he ought to adjust. I agree that we should avoid bringing politics into discussions of the nationalised industries, but that was very much what he was doing in his speech, although he blamed Conservative Members for it.
He says that this is a very fine report. I think that it probably was a year ago. Will the Minister tell us why it has not been possible to produce the up-to-date report before we rise for the Summer Recess? This question applies not only to the Central Electricity Generating Board because it happens in other nationalised industries, too, and it is very inconvenient. The year end for most of these industries is 31st March but they seem not to manage to produce their annual reports in the four months before we rise for the Summer Recess.
There may be some vital point in one of these reports of which none of us is aware. If we were aware of it there might be some Parliamentary action which we desired to take. I urge the Minister to see whether there is anything he can do to speed up the preparation of the annual reports of the nationalised industries for which he is responsible. Let him do a bit of modernising. Let him see whether he can cut down the period between the year end for the nationalised industries and the production of their annual reports.

Mr. Frederick Lee: The hon. Member will agree that this is not the fault of the industries. This report has been available for 10 months. They may well turn to us and say, "We get our report out but if you do not debate it you must not blame us."

Mr. Lubbock: I am talking about the report for the year ending 31st March, 1965. Although it is too late this time, I hope that the Minister will see whether these reports can be produced in the four months before we rise for the Recess.


Most large companies manage to work within this sort of time scale. I see no reason why the C.E.G.B. should not manage it. I hope that the Minister will discuss this matter with the C.E.G.B. and the Electricity Council to see if means can be found to speed up the provision of these annual reports.

Mr. Palmer: I have considerable sympathy with the hon. Gentleman's point and, as one who reads these reports in considerable detail, I assure him that the facts and details which the industry includes in its reports represent the sort of information which would not be found in the average company report.

Mr. Lubbock: The hon. Gentleman knows a great deal about management and will be aware that frequently it pays to produce information quickly, so that it may be acted upon, rather than produce it in minute detail but too late for action to be taken. I would be prepared to see a limited reduction in the amount of detail presented if we could get the information more promptly.
Many questions have been asked about the industry's capital expenditure programme and whether the Chancellor's recent announcement will mean any scaling down of the C.E.G.B.'s investment programme. I do not see how such a scaling down could take place. Indeed, it would be unthinkable for it to happen and I hope that the Minister will make a less equivocal statement at the end of the debate than he made at the beginning. To relieve the anxiety which exists, I hope that the right hon. Gentleman will assure the House that there is no question of any scaling down taking place in the capital expenditure programme of the industry which might affect the amount of electrkity generated in future years. I hope that he will also assure us that whatever studies may be going on in the industry they are being confined to items of capital expenditure which bear no relationship to the capacity of the industry.
It may be practicable to do something about office blocks and ancillary expenditure which will not affect the total output of the industry. I have no objection to that sort of thing happening as part of the Chancellor's measures. Nevertheless, we should be given a categorical assurance

that no restrictions will be placed on the investment programme of the industry which will affect its output in future years.
What a magnificent achievement for Britain the A.G.R. station is. The documents which we have been sent by the C.E.G.B. prove that we are in advance of the world in this new development. I disagree with the remarks of the right hon. Member for Bridlington (Mr. Wood) on this subject. I regret that the right hon. Gentleman is not in his place because I would like to have addressed my remarks to his face. We in this country tend to play down our achievements far too often. I was particularly disappointed, therefore, to hear the right hon. Gentleman say that a number of people had attached too great an importance to this new development and that it would be wholly wrong for us to exaggerate its future potential. He went on to say that we will be depending on dominantly coal-fired stations for a long time to come.
If one considers the time-scale of capital expenditure in electricity generation I suppose that the right hon. Member for Bridlington is partially right because the Minister said earlier that there were 15 coal-fired power stations under construction Naturally those will go ahead. Nevertheless, the implications of this new development for the future type of station which we will have in the C.E.G.B. are, I should have thought, very much more important than the right hon. Member for Bridlington seemed to think.
I heartily congratulate Atomic Power Constructions Ltd. on winning the recent tender and the Atomic Energy Authority for the pioneering work it has done in this sphere, work which has enabled us to lead the world. The hon. Member for Bristol, Central (Mr. Palmer) suggested that perhaps we had had too large an atomic energy programme, but I assure him that without the foundation of the magnox stations we would never have been able to develop the A.G.R. system. The Magnox programme was of an absolute minimum size to keep the three consortia in business. At one time it looked as though one of them would have to fold up. A dangerous situation occurred a few years ago because of the contraction in the nuclear power programme.
Initially we had five consortia. Two of them went out of business and we were left with three. There was only just enough work in the Magnox programme to keep those three in business pending the arrival of the A.G.R. programme. Therefore, although economically one may criticise the Magnox programme—or, from the point of view of the profit and loss account, of the C.E.G.B., too—it is now beginning to pay off and we have an industry which cannot only produce A.G.R. stations for the electricity industry of this country but will, I hope, be able to export these stations to all parts of the world.
I am an optimist about this, particularly when I look at the conservative assumptions which have been made in the document which has been presented to us by the C.E.G.B. I note that the comparison of costs between the A.G.R. and other types of stations the C.E.G.B. assumes a 20-year amortisation life and a 75 per cent. load factor. That compares with the design of the components used in the station of 30 years and 85 per cent.

Mr. Patrick Jenkin: Technically speaking, to have a 30-year life and a constant 85 per cent. load factor is theoretically possible but practically almost impossible. Would the hon. Gentleman, therefore, not agree that the figure of the potential cost of electricity based on both those assumptions cumulatively is wholly unreal?

Mr. Lubbock: With respect, I do not think that the hon. Gentleman is right. Conventional stations depreciate over 30 years. I hope that he will go with me that far. It is equally true that the prototype A.G.R. station at Windscale has been operating at a load factor of over 85 per cent. and, for that reason, I suggest that the estimates of performance are quite conservative.

Mr. Ridley: Is it not also true that the Oyster Creek criterion is an 88 per cent. load factor and a 25-year amortisation, which is one reason why the cost is so much higher here than in America?

Mr. Lubbock: I wondered earlier why the Oyster Creek figures were mentioned because they seem rather meaningless unless one knows all the assumptions which have been made in arriving at those costings.
Even if there is a difference of opinion between the hon. Member for Wanstead and Woodford (Mr. Patrick Jenkin) and me as to the pessimistic or optimistic nature of these assumptions, I refer him to the part of the C.E.G.B. document which deals with the development potential of the A.G.R. We are told that the first A.G.R. will have a coolant gas pressure of 450 lbs. p.s.i. and that there is every hope of raising that pressure to 600 lbs. p.s.i. at future stations. It is pointed out that great benefit will also be derived from increases in reactor sizes. The C.E.G.B. suggests that this will mean a reduction of as much as 10 per cent. in the cost of generating electricity if the later reactors in the A.G.R. programme are double the size of the ones being provided at Dungeness B.
This raises an important point, for the Minister said in response to an intervention which I made when he was speaking that he thought that 5,000 megawatts, which was the minimum scale thought to be desirable by the Atomic Energy Authority in its Annual Report last year, was the minimum and that we were going to think in terms of a programme with a substantially larger figure than that. I hope we can be given more information about that, because the whole of the 5,000 megawatts envisaged by the Atomic Energy Authority would be taken up by four stations of the size of Dungeness B, and we are already talking of a station twice as big as that. It therefore seems that we shall have to think of an A.G.R. programme considerably larger than the 5,000 megawatts mentioned.
What does the Minister think about this? How long will it be before we get a fast breeder reactor in production operation? Do we still stick to the time scale we had in mind a few years ago, when it was said that by 1975 the fast breeder reactor would be fully tested, that the prototype would have been in operation for a sufficient number of years to bring the station into a nuclear power programme, and that it would probably be the only type of station we would order from then onwards, because if the Atomic Energy Authority's hopes were realised it would be considerably cheaper ultimately even than the A.G.R.?
Will the Minister tell us his thoughts, in the light of these costings, about the


relative position of nuclear and conventional means of generation for the future power programme? It would be quite impossible so to adjust the programme as to change the 15 coal-fired stations that have been ordered, but what about the future orders that will be placed by the C.E.G.B.? If these figures are absolutely reliable, as I am sure that they are, should we,, not be ordering any more new conventional stations at all, and should not future stations be entirely nuclear? That is the logic of the figures in the Report—

Mr. Palmer: The hon. Gentleman is overlooking something that should never be overlooked in relation to a large electrical transmission system. Everything depends on the siting and costing of the station, which means that it may be economical to use a nuclear power station on one side and equally economical to use a coal-fired power station somewhere else.

Mr. Lubbock: There may be more geographical limitations on the siting of a nuclear power station than on the siting of a coal-fired station. We have not yet got to the stage where nuclear power stations can be placed inland, but the time may well come when there is no real difference in the criteria to be applied in siting an atomic reactor and any other kind of power station. The problem of cooling water also applies to conventional stations, which is why so many have been placed along the Trent for example. I think that this difference in cost is so striking that there would have to be very strong reasons for placing further orders for conventional stations, and this should be one of the basic parameters of the Minister's fuel policy which he hopes to develop, I think, between now and the autumn.
Let the Minister tell us how many tons of coal will be consumed by the Central Electricity Generating Board. The Minister should add on to the 65 million tons he mentioned the consumption of the 15 coal-fired stations under construction, and then tell the Coal Board that that will be the total amount required by the C.E.G.B. in the early 'seventies. It is important that the Minister should come clean on this, and at least give the National Coal Board some idea of what

is expected of it. It is much worse for the Board to have no target whatever than to have a target that is less than it might hope to get.
Another aspect is the sales potential of the A.G.R. abroad. What are the Government doing to promote the sales of A.G.R. stations? I take it that the C.E.G.B. is doing something there, because of the following sentence in the technical and economic appraisal:
It is hoped that the results presented will be of value to electricity supply undertakings throughout the world.
I take that to mean that the C.E.G.B. is meeting its responsibility for distributing information to people in other countries who may wish to place an order for an A.G.R. station. This is so important that the Minister himself should be taking an active part in seeing that these facts and figures are put before every electricity undertaking in the world, and that there is a hard selling campaign of the A.G.R. in all countries where there is a possibility of its being ordered.
It was, I think, the hon. Member for Cirencester and Tewkesbury (Mr. Ridley) who said that the area boards could not be blamed too much for the vast increases they imposed, because 80 per cent. of their costs were determined for them by the C.E.G.B. Whether or not that is true, it appears to me that the machinery for the representation of consumer views is totally inadequate. I have complained of one matter before, and I will complain of it again to the Minister now, because I do not think that he has heard of it. The London Electricity Board increased its charges by between 9 per cent. and 10 per cent., and his right hon. Friend the First Secretary referred that increase to Mr. Aubrey Jones. The South-Eastern Electricity Board increased its charges by 13·3 per cent., and when I asked the First Secretary why that increase, too, had not been referred to the National Board for Prices and Incomes, he replied that the consumers' representatives had not asked for it to be referred.
That indicates that the consumers' representatives are not doing their job. I am upset about it, and my constituents are upset about it, and I can tell the Minister that I have had a good many letters about these increases. We have here a very anomalous position when this Board that has been set up to protect


the public against unreasonable price increases looks at things in such a very arbitrary way, and it is a matter of luck whether the supposed representatives of the consumers are doing their job properly. The Minister should try to persuade his right hon. Friend to reconsider what he said to me on this subject, and refer the matter to the National Board for Prices and Incomes.
If we are to have a policy for prices and incomes we must realise that people will demand wage and salary increases if they find that their own living costs are going up. I do not mind if the First Secretary thinks that people are prepared to stand increases of 13 per cent. in electricity charges without asking their employers for a rise. I only say that he is wrong and that this happens, or that people instruct their representatives to try to negotiate a rise on their behalf.
I very much agree with those hon. Members opposite who have said that a pricing policy must come before an incomes policy, that until we have managed to control prices we shall never get people to moderate their demands for wage and salary increases. Here is a glaring case where the Minister should intervene.
A final point concerns the regulation which came into effect on 1st July preventing landlords from charging over a fixed maximum amount for the resale of electricity. The Minister said in his opening speech that the area boards had no power to enforce this and that it was necessary for the individual consumer to look after his own interests—by which he meant that the consumer has to take the landlord to court and can then recover the excess amount from him. How many cases have come before the courts since 1st July? If the Minister cannot give that figure, can he tell me how many actions are pending? It would be interesting to know whether consumers are using their new rights and whether sufficient publicity has been given to the machinery available to them to do so.
If the Minister finds that there are very few cases, it indicates that consumers are not aware of their new rights, not that exploitation and over-charging is not taking place. I am aware of several cases of people still charging over the fixed amount and appearing to get away with

it. Unfortunately, in all these cases the person who is overcharging is the operator of a caravan site. There is very little one can do in these cases because, if any person brought an action and recovered the excess, the operator would retaliate by increasing the charge he makes for the plot.
One case which I have drawn to the attention of the Minister of Housing and Local Government is of a site operator who immediately on 1st July raised the charges for the plot so as not only to recover the amount he was overcharging for electricity and was no longer entitled to but actually to make an increased profit. He sees this as an opportunity to fleece people on the site. I say with great regret to the Minister that, welcome as this move was for people living in rented accommodation, it will have no effect at all on people who live in caravans.
I have said some fairly harsh things about the slowness of the C.E.G.B. and the Electricity Council in introducing their reports, but I conclude my speech by echoing the best wishes which other hon. Members have offered to them for the coming year.

8.14 p.m.

Mr. Patrick McNair-Wilson: I wish to correct the hon. Member for Orpington (Mr. Lubbock) by saying that the price increase announced by the L.E.B. in June was 11 per cent. not 9 per cent. to 10 per cent. as he suggested. This underlines the fact that this debate, while not affecting my constituents from the point of view of power stations, directly affects them from the point of view of cost of electricity as consumers. Therefore I welcome the opportunity of discussing the industry.
It is rather sad to reflect that by the time we come back after the Recess we shall have had a Labour Government for rather more than a year. The promises made about a co-ordinated fuel policy will still be unfulfilled. When we remember the fighting words in the Labour Party's election manifesto:
We will have a co-ordinated policy for the major fuel industries
and similar noises which have been made subsequently, we have also to remember that a year will have passed in which nothing has happened.

Mr. Frederick Lee: indicated dissent.

Mr. McNair-Wilson: The Minister disagrees, but the fact is that the Fuel Advisory Council has met only three times and my hon. Friend the Member for Cirencester and Tewkesbury (Mr. Ridley) stated the number of minutes spent in meetings of that body.

Mr. Lee: The hon. Member should not judge of the quality of my meetings by the lack of quality of his own.

Mr. McNair-Wilson: That is good fighting stuff, I let it go to return to the Minister's other comments. As yet we have no co-ordinated fuel policy, and I do not see one coming. We remember the famous, almost infamous, words:
Labour is ready poised to swing its plans into instant operation,
We see that they were not true.
We have had a number of debates in the last few weeks, on the fuel industries, notably the gas industry. It is useful now to be looking at another of the great industries which competes so acutely with the gas industry. The electricity industry is unusual in some respects in that it is essentially a capital-intensive industry. I was interested to note when reading yesterday's Evening Standard an article headed: "Look, No Hands". It told about a guide showing a party of visitors round the Rugeley Power Station in Staffordshire who was stumped by one question: "Please", said a small boy, "may we see some men working?" To keep this capital investment at a level at which the industry can take advantage of all the technological advances made is an enormous task. The Minister has told us that the industry will have to borrow about £400 million in the next year. I do not want to go over the ground traversed by my hon. Friends, but I must ask the Minister to make sure that whoever winds up this debate shall give a definitive answer about where the money is to come from.
We have had three Budgets this year from the Labour Government and each has been tougher than its predecessor. We see a cutting down of public expenditure at various levels. It is not enough for the Minister in his opening remarks to make bland comments to the effect that he did not think there was any need to suppose there would be any

cutting back in the electricity industry. He managed to satisfy the hon. Member for Bristol, Central (Mr. Palmer), but he certainly did not satisfy me, and I do not think he satisfied any of my hon. Friends. We shall look forward to a definitive statement later.
This debate is taking place against a background of uncertainty. That was a point made by my hon. Friends in the debate on the gas industry. All the fuel industries are undergoing very considerable change. Great and welcome advances are being made, and I wish to be associated with everything that has been said in congratulating the electricity industry on its advance, but while those changes continue and there is this uncertainty the need for some clear lines of approach from the Government are made the more necessary. One of the greatest questions which have to be faced by all the fuel industries, and notably the gas and electricity industries, is the use of the primary fuel in future.
The electricity industry is at the moment almost entirely coal-based. If we take the figures given by Sir Ronald Edwards at Brighton in June, we see that in 1963–64 the 1 million ton coal equivalent for those years in the electricity industry accounted for 61 million tons, which is 86 per cent. and in 1970–71 it will still be high at 78 million tons, although falling in this case to 76 per cent. The oil industry's contribution to the manufacture of electricity remains fairly static, from the 1963–64 figure somewhere around 7·8 million tons and, therefore, about 11 per cent., to a 1970–71 figure of about 12 million tons, or 12 per cent. The nuclear energy aspect shows a startling steep increase, but coal is still the basic primary fuel.
I shall refer to the comparative competitive position of nuclear energy. I hope that the Minister, realising that coal is still the primary fuel, will give consideration to seeing that it is used as cheaply and as efficiently as possible. I suggest, for instance, representing a London constituency, that large bulk loads of coal should be brought into the Port of London in large ships—say, of 22,000 tons—and then taken by barge up to Battersea or Fulham to ensure that we get the freight side of this primary product carried out as cheaply as possible. Much could be done to help


to make the industry more economical by improving the transport arrangements.
Something has been done about big power stations. Of course these are more economical, but it is always difficult to equate the big station which is economical to the power station located at the load, because the two are in a sense contradictory. If it is desired to have power stations with the shortest possible transmission lines—that is, as near to the load as possible—the stations will be scattered. Those, too, as near as they can be matched, will be the keys to economy.
My hon. Friend the Member for Cirencester and Tewkesbury spoke of his artistic appreciation of transmission lines and pylons. I do not share that view. I know that my hon. Friend is an artist and therefore entitled to his view. I hate the steel cobweb which is going up all over the country, this pylonitis from which we are suffering. I was delighted to hear that the research figure has risen from nearly £6 million to £10 million this yea I hope that research will be carried out into the most effective ways of burying cables. The direct current has advantages, because the current tends to travel in the centre of the cable rather than on the periphery, as is the case with alternating current, and direct current helps to avoid short circuiting.
I was delighted to read these words in paragraph 264 of the Report, admittedly a year old:
The use of high-voltage direct current transmission, as in the Cross-Channel link, has many advantages, including reduced cable costs and short-circuit levels … research is therefore being undertaken to develop better and more economic methods.
It is extremely costly. At a minimum, to bury a 400 kilovolt cable will cost about £1 million a mile. According to the Report, we shall need about a single track of the M.1 to cope with the cable weight. While recognising the needs of industry, I want to see Britain preserved as much as possible. I am not one of those who are prepared to sacrifice everything without trying to see what can be done to preserve Britain.
I turn to the nuclear programme. Every hon. Member who has spoken has praised the nine Magnox reactors and their performance. They have been a great success. They are enormously expensive to

build, but comparatively cheap to run. For the very reason that they are so expensive to build, they have never been fully economic and able to compete with the best of coal-fired stations.
A totally new situation has arisen with the arrival of the advance gas-cooled reactor. I will quote the figures supplied in these excellent booklets which have been sent to hon. Members. The electricity so generated is 25 per cent. less expensive than that from the most powerful new Magnox reactor and 10 per cent. cheaper than that from the most up-to-date coal-fired station, that at Cottam. We are now in a totally new situation where electricity can be made more cheaply, more efficiently and more cleanly by this new process.
It raises for the Minister a new question mark. After all, in the second nuclear programme—that is, the programme for 1970–75—the Minister has accepted the 500 megawatt output at a cost of about £400 million. This was before A.G.R. If A.G.R. is so much cheaper and more effective, I should like to know what the Government's plans are. In view of this new cheapness, will they increase the figure of 500 megawatts and build it up to get more from the same £400 million? Will they cut their coat to the £400 million and leave it there? If they are to increase their programme beyond the original figure, a completely new situation will be created for the coal industry. With this new cheap power at the Minister's command, will he institute a totally new programme of nuclear power stations, perhaps almost totally at the expense of the coal industry?
We recognise the problems involved in constructing a co-ordinated fuel policy. It is made even more difficult by the fact that these technological changes are taking place. However, this does not alter the fact that the Government made some pretty sweeping promises. Indeed, the Minister in his election address in 1964 made the sweeping statement that Labour would attack persistent rises in prices. As I said at the beginning of my remarks, we in London are not so happy about rising prices in the electricity industry. In the last ten months Labour's pledges have been very largely discounted. However, I still hope that we can see the policies. The policy for fuel is as important today


as it was when the promises were made. I hope that when we return after the Recess we shall be able to see the beginnings of a co-ordinated policy which will give a fair place to the electricity industry and the gas industry and take into consideration all the new fuels which are at our command.

8.27 p.m.

Mr. Merlyn Rees: The hon. Member for Lewisham, West (Mr. McNair-Wilson) will forgive me if I do not take all the points he raised. I shall comment later on his remarks about amenities.
A short while ago an hon. Member asked whether the fact that the nationalised electricity industry had been a success shows that there was some particular virtue in nationalisation justifying its spread to other industries. I well recall two of the arguments which were advanced many years ago in all the discussions which took place on public ownership of the Morrisonian type, with boards and so on. The first argument was that this type of organisation would encourage technical advance and that there were particular advantages therefore in industries such as gas and electricity being taken over. The second argument was that the vast sums of capital involved could not be raised through the normal channels of joint stock companies. I only say this because it is my strong view that the success of public ownership in this field does not mean that public ownership of this type is applicable in other forms of industry. There may be other forms of public ownership which it would not be in order for me to develop tonight.
All I argue is that in this form of industry public ownership of this type has proved its worth; and, in spite of all the badinage of politics, it took a good many years for all the plans which were set on foot in 1947 and 1948 to come to fruition. When it comes to elections and when the former Leader of the Opposition uses folish words about public ownership, it does nothing but denigrate the country. Both public and private enterprise have a part to play in this country. The Report which we are considering shows the great success of the electricity industry in general, and proves that when it was

decided to take this industry into public ownership it was the right thing to do.
This does not mean that there are not many questions that have to be answered by Ministers in the years to come. This is a time when new fuels are appearing on the market. I was looking the other day, in another connection, at all the estimates that were made on fuel needs in the 1950s, and most of them have been wrong. With due deference to any statisticians, it is likely that the most that the Minister and the various boards can do is to make as intelligent a guess as possible. But whatever is done in this respect, it must be a flexible policy because constantly new factors have to be taken into account.
In this respect—and I am sure that everybody present is interested in this question of fuel policy—I would commend the brief pamphlet recently produced by P.E.P. called "Questions of Fuel Policy". Some very interesting points were raised which are the direct concern of the electricity industry. The question of amenity is raised in this way. The pamphlet asks:
Is the balance between amenity and efficiency rightly struck at present in the lengthy procedure of licensing, public inquiry and the like that required …?
Is not this a great weight on the back of the electricity industry? I would be the last person to want to ruin the countryside, but the electricity supply industry has this great burden on it at the moment.
Another question is raised, which brings in the other fuel industries:
Is the consumer adequately informed of the price trends in the various fuels?
Many people are now moving over to central heating. This is a relatively new development in this country compared with the United States and Canada. When I talk to people about this, the most preposterous figures are put forward in favour of gas or electricity. People say they have looked at Which? and that they have written to various consumers' organisations. Bearing in mind that the figures will not be proved accurate over the years, it would help very much if more accurate figures, given the weaknesses involved in them, could be provided.
The other question that was asked in the pamphlet was:
Are research and development adequate and properly organised in these industries;


in electricity, in particular, is the balance of activity between the Central Electricity Generating Board and the Atomic Energy Authority the right one?
I am not suggesting that these questions are capable of immediate answer, but, to come back to my original point, I think public ownership is the right sort of organisation for this industry to solve these questions. But, having said that, the problems are there, and they are very great problems with which my right hon. Friend has to deal.
I intervened shortly in this debate to raise two questions. The second one is of a constituency nature; at least, it affects an area near to my constituency. The first one is of a more general nature. Nobody looking at the nationalised industries—and this is equally true of some of the bigger private firms, the oil companies and so on—could do anything but praise the training schemes that they provide. They are excellent. They lead the way. What sort of training is provided in the electricity industry at management level? Looking through the Report, I see that at Buxton there are facilities for this. However, I am particularly concerned with one aspect.
What training is provided for shop stewards and people of that kind? Many private industries provide excellent schemes of training, not within the firm—this is the point I wish to emphasise but outside the firm, provided by the local colleges of technology and in some cases by extra-mural departments in universities. The extra-mural department of the University of Leeds provides such schemes. I know of schemes in other parts of the country and they are growing, but I find that when I visit some colleges of technology and ask whether the nationalised industries participate in this the answer is, "No". This is a mistake. The answer when I check it is that the nationalised industries provide training themselves. I ask, first of all, whether they provide training for shop stewards. It would be advantageous sometimes for people in the nationalised sector to mix with people from other parts of industry, and particularly with shop stewards from other industries. I know how valuable this can be in the mingling and mixing of ideas.
In the Yorkshire and Humber area from the regional planning point of view,

there is a close connection between electricity supply and the coal industry. All the power stations mentioned by the hon. Member for Barkston Ash (Mr. Alison) are coal-fired and are in a very successful area of the N.C.B., an area which can look forward for many years to come to full working. There are not the same problems were as there are in other parts of the country. There are shortages of labour, but for reasons other than those which apply elsewhere. Further, given the vast extension by the electricity industry, it is nevertheless poaching, if that is the right word, electricians from the coal industry.
The question is which comes first? The coal must be provided to fire the stations, yet despite all the money spent by the N.C.B. it finds itself short of electricians. Is it not possible for some sort of co-ordination in that area? There will be a close connection between the two for many years. I made some inquiries here and the plain answer which I had was "No". I wonder whether this could be looked at again. I grant that the electricians must be under the full control of the N.C.B. and the pit managers for safety reasons, but, nevertheless, I am sure that something could be done.
I come back to the general point. It has been a great pleasure to look through the reports. The electricity industry last year and this year provided, and for many years to come will provide, a large bulk of power in this country whether coal-tired or atomic energy-fired. We should all be proud of this and we should "take a self-denying ordinance" at the next General Election and realise that if we denigrate any part of industry for political purposes we do great harm to the country. I despair sometimes at the way in which people are prepared to run our country down. We lead the way in so many fields—in the coal industry and in the electricity industry. The least we can do, wherever we are, is to praise the electricity industry which is a credit to us all.

8.38 p.m.

Mr. Patrick Jenkin: The hon. Member for Leeds, South (Mr. Merlyn Rees), in his concluding remarks, said something with which I am sure all of us can agree. We have taken part in a number of debates


on the nationalised industries in this Session. So far, we have had several on the gas industry and now we are having one on the electricity industry.
I think that it has been common ground between both sides of the House that the performance of these industries has been of a very high order and that no one has wanted to make any political points on whether or not they were nationalised. The trouble has always come when we on this side of the House have offered praise to the nationalised industries on the progress which they are making and the way in which they are grappling with serious problems and we are immediately taunted by hon. Members opposite who say, "You are in favour of nationalisation if you are honest with yourselves." This does not follow at all, as the hon. Member for Orpington (Mr. Lubbock) made clear.
The only other point I take up following the speech of the hon. Member for Leeds, South is his reference to the amenity problem and the prospect which my hon. Friend the Member for Lewisham, West (Mr. McNair-Wilson) graphically described as a vast steel cobweb enmeshing the country. Taking up a constituency point for a moment, I express my thanks to the Generating Board for having agreed to bury two miles of the Brimsdown-Barking transmission line which is to replace the existing one which runs partly through my constituency and partly through that of my hon. Friend the Member for Waltham-stow. East (Mr. John Harvey).
When the proposal for an overhead line was first mooted, it caused grave concern locally because people would have had these enormous pylons actually stuck in their back gardens, with the foot of the pylon just a few feet from their back windows. One can imagine the despondency with which such a prospect was viewed. I am happy to say that the Generating Board saw the point very quickly and agreed to bury that part of the cable.
This debate comes at a significant point in the history of the electricity industry because of the announcement and figures recently published with regard to the advanced gas-cooled reactor proposal for the Dungeness B power station. I shall return to some of the

details of that in a moment. I agree with those who have said that, however much one may question some of the assumptions made and the figures published in this connection, it nevertheless represents a factor of considerable consequence. The picture of forward demand for coal, for instance, must have changed as a result of this event.
The increased demand for capital which a nuclear generating programme will undoubtedly bring will be of the utmost importance because nuclear stations, capital-wise, are very much more expensive than coal-fired or oil-fired stations. I reiterate the question, and I hope that the Parliamentary Secretary will deal with it rather more adequately than did his right hon. Friend: where is all the money to come from? Hundreds of millions of pounds will have to be raised over the next few years, and it is very difficult to see how the money will be found.
There is also the problem which a nuclear programme brings of dealing with peak load demand. A nuclear station is essentially a base load generator, and, if an increasing proportion of total generating capacity is to be in the form of nuclear stations, there will be the growing problem of dealing with peak load demand. We have the gas turbines now increasingly being installed as a relatively inexpensive means of meeting peak demand, and it may be that this method will have to be considerably extended as the old coal-fired base load plants go out of commission.
This raises the question of the fuel duty. There has been a considerable argument about whether the gas turbines used to meet peak load demand should have to bear fuel duty on the feedstock. It would be even more remarkable if, in these circumstances, our electricity industry had to pay it whereas the gas industry was exempt.
I disagree with the suggestion of the hon. Member for Bristol, Central (Mr. Palmer) that there should be some sort of public utility tax applied to both these industries. In my view, there is no justification at all for a tax on fuel in this connection except in the shortest possible term to ease the transition problems of the Coal Board in the resettlement of miners displaced by technological advance. This must be in the shortest


possible term, and I hope that it can be shorter than the five years mentioned in some quarters.
Turning to the specific problems raised by the choice of the advanced gas-cooled reactor for Dungeness B, may I say, first, a few words about the background and how we find ourselves where we are. The Atomic Energy Authority developed the Magnox gas-cooled reactor, and nine stations have been built broadly adopting the same technology, though, of course, with many improvements and developments, from the Berkeley Power Station on the Severn Estuary in 1962 to the latest in course of construction at Wylfa, in Anglesey, due to come on steam in 1968. Berkeley had only a 275 MW designed output. Wylfa has a designed output of 1,180 MW, which gives an indication of the development in the size of reactors which has taken place. Similarly, the cost has come down substantially. Berkeley cost about £180 per kW of installed capacity whereas Wylfa is about £100 per kW of capacity.
While these developments have been going on in this country, the Americans have also been advancing but on a much broader front. They have been developing different sorts of reactors, not only the Magnox gas-cooled, but the boiling water reactor. Work has been done on the pressurised water reactor and in Canada on the P.W.R., also.
Early last year, President Johnson announced that the American nuclear industry had established what he called an economic breakthrough. He was referring to the tender which had been accepted for the construction by the General Electric Co. of America of a power station at Oyster Creek, south of New York for the Jersey Electric Company. It was due for completion in 1967.
The breakthrough took the form of what one can only describe as an astonishingly low capital cost for the plant. Compared with our own latest plant at Wylfa of £100 per kW of capacity, Oyster Creek, which has a designed output of about 515 MW had a turnkey contract price in the tender which was accepted of £48 per kW installed. The anticipated output of the plant—again, to use the technical term—when the output is stretched will be 640 MW instead of being 515 MW and the cost will be down to £38·5 per kW.
These figures include the interest on the capital during construction. They include the land and the training of operatives, but not the initial fuel charge, which is a substantial extra amount. The significance of these very low capital cost figures is that electricity can then be produced at a much lower cost than anything which had hitherto appeared possible from nuclear stations.
The production cost for Oyster Creek in English equivalent is 0·34d. per unit. At stretched capacity it will come down to 0·31d. per unit, falling, perhaps, over the years to 0·29d. per unit. That is why President Johnson hailed it as so remarkable a breakthrough since it would mean that electric power could be available anywhere in the United States at the same cost as, or even lower than the cost of, power from a coal-based power station situated right on top of a coalfield. When one bears in mind the vastly cheaper American price of 20s. to 28s. a ton compared with the comparable price here of about 60s. per ton, one begins to realise the extent and significance of this breakthrough in America.
It is against that background that we come to the tender which was sought by the Central Electricity Generating Board for Dungeness B. The Atomic Energy Authority has been doing work for many years on the A.G.R. and has for about two years been operating a pilot plant with a 30 mW plant at Windscale. Originally, I understand that the intention was that the tender should be only for A.G.R., but, in view of the published facts about Oyster Creek, inevitably it was necessary to widen the scope a little and the C.E.G.B. undertook to consider tenders for a boiling water reactor, because that is the nature of the reactor at Oyster Creek, provided that it satisfied all the conditions required for a reactor operating in this country.
Tenders were received in February this year. They were examined exhaustively. One cannot but be impressed by the quality of the assessment that has been done on all the tenders that came in this highly complicated matter to make sure—and I have been much impressed by this—that the ultimate figure could be really compared like for like so that the best possible choice could be made. It turned out that there were two principal coil-tenders, Atomic Power Construction, for the advanced gas-cooled reactor, and the


Nuclear Power Group, which tendered for the boiling water reactor designed by the American company. In the upshot it turned out that the capital outlay for the A.G.R. was £78·4 per kW installed capacity and for the boiling water reactor £70·9 per kW.
So it immediately appears that these figures are substantially higher than the American price, which was about, as I say, £48, or, alternatively, £38. Production costs of the boiling water reactor and the A.G.R. are significantly different. A.G.R. uses a less enriched fuel and, therefore, has a lower operating cost, and has higher availability than the particular one because of the new engineering advances which have been made in design and the lower labour cost and the result of taking both capital cost and the operating cost and putting them on the same basis and comparing them was that A.G.R. came out marginally higher.
Some rather extravagant language has been used about the A.G.R., not, I think, wholly justified when one bears in mind that the ultimate advantage which A.G.R. had over B.W.R. was about three-hundredths of 1d. per unit. If we have a power station producing about 1,200 MW, three-hundredths of a 1d. per unit represents, over several years a considerable sum of money, but that is, in fact, the margin one is talking about, and I am not at all sure that it qualifies—

The Parliamentary Secretary to the Ministry of Power (Mr. John Morris): Will the hon. Gentleman accept it from me that the margin is a difference of 10 per cent. on generating cost?

Mr. Jenkin: As I understand the matter, 10 per cent. is the figure for the comparison with coal-fired stations. I am following the figures in Table I in the Appraisal Paper immediately above the double underlining. Whereas with the A.G.R. it is 0·457d. per unit with the B.W.R. it is 0·489d. a unit and, taken to two decimal points, that is three-hundredths of 1d. That is the difference between the competing tenders.
The Minister, in his announcement on 25th May, described it as the greatest breakthrough of all time and said that we had hit the jackpot. But, quite apart from the narrowness of the margin, what has puzzled all commentators is why the tender in this country for the boiling

water reactor designed by General Electric, the same people who built Oyster Creek, and who, since then, have tendered for boiling water plants at comparable prices, should be so wildly higher, for a plant in this country, than it was for a plant in the United States. This is a question which, I think, does require an answer, and, of course, there is no answer in this assessment at all.
Oyster Creek, as I said, even at design capacity was at £48 per kW and Dungeness B was £71 per kW capacity and that represents an increase of 66 per cent. I appreciate that there may well be parameters and assessments of length of life and perhaps of some of the safety requirements and some of the civil engineering problems which could account for part of this discrepancy, but the discrepancy is of such a fantastic size that it really does begin to raise major doubts. One begins to wonder whether the Nuclear Power Group really wanted the contract.
Was it really trying? Are we sure that its tender is the lowest possible one that could be submitted for a boiling water reactor in conditions in this country? It is the discrepancy between the figure at Oyster Creek and subsequently at Dresden II—which is an American power station where the bid is slightly higher than at Oyster Creek, but which is in the same range—and the figure put in by the Nuclear Power Group for a boiling water reactor designed by American General Electric which makes one ask these rather searching questions.
It has been suggested by some people that General Electric, in America, is losing money and will not be able to make it pay and that all it is doing is bringing up the figure in this country to what would be necessary to make it pay. But, look at Dresden II power station. The design capacity is 755 MW at £42·5 per kW. If it is stretched to 820 MW, the price per kW becomes £39.
Oyster Creek was not a once-for-all project. It was a perfectly realistic price, and it can be compared with figures in Germany, where total inclusive prices in tenders for a 600 MW power station look like coming out at between £50 and £54 per kW, compared with the figure here of £70.
One is forced to conclude, if one of the reasons that I have suggested is not the


right explanation, that here is one more example where we find that costs of construction in this country are markedly higher than those in the United States or in the countries of our neighbouring European competitors. One hears of one of the major components for the boiling water reactor which was to be made in this country to exactly the same design as had been put in in America, and the cost was to be two and a half times as much. That is perhaps the real explanation of why the boiling water reactor is so much more expensive in this country than in America.
One is led to ask: why have we got ourselves into this position? We were undoubtedly leading technologically some years ago, but now we find that the Americans, once again, have caught up and are now able to build an economic power station substantially cheaper than we can here to the same design, and at almost exactly the same price as that of one of our own design. We must not sit back and congratulate ourselves on this technical advance, striking though it has been. I do not wish to denigrate the work that has been done, because it has been of a very high order. But we must recognise that there is still a long way to go. The problem of trying to design and build nuclear power stations cannot be worked out in a country as small as our own in competition with a continent the size of America.
The hon. Member for Bristol, Central (Mr. Palmer) put his finger on one problem when he said that with the Central Electricity Generating Board we have only one major purchaser, whereas in America there are several major electricity suppliers who can bid and who are the customers. It gives an opportunity for competition, not only in the construction of power stations, but in the design and development of whole reactor systems. That is something that we have not got in this country. The Atomic Energy Authority is the only body which designs reactor systems, and, naturally, to conserve its resources, it is never able to advance except on a very narrow front. It has confined itself to gas-cooled reactors.
That is one more example where it will be important for us to join up with Europe and become part of the European market on a continental scale. We could

get very much closer to Euratom. Good work is being done on the Dragon project, at Winfrith Heath, and at C.E.R.N., in Geneva, but much more needs to be done in Europe as a single market for atomic reactors and generating equipment, so that we can have here the same conditions as those which have allowed the Americans to make their very striking advance over the last few years.
The necessity for doing this has been underlined by the "three Budgets" announced by the Chancellor, because we are still struggling to pay our way. We are still having to go on griping about the economic performance of this country and the stability of the £. That is why it is essential to get this sort of sub-structure to our industry right. If we get our energy costs right, the chances are that we will get the rest of industry right.

9.0 p.m.

Mr. John Peyton: It seems rather sad that we should be debating electricity at this time of the year, towards the end of what seems an almost interminable succession of Parliamentary activities, at a time when electricity is not in the forefront of people's minds, and that we should be doing so on the basis of reports which are very old history indeed.
I was disappointed that the Minister appeared in the House today much more in the rôle of an historian than that of a prophet, because, despite the indulgence of the Chair, and the rest of it, there was very little attempt on his part to raise even the slightest corner of the veil so that we could have a look at future prospects.
I am sure the hon. Gentleman will not think that I am being unduly partisan if I say that I am very disappointed that the back benches of a party which is wedded to the creed of public ownership and nationalisation have shown so little interest in the progress of this immensely important publicly-owned industry.
The Minister referred to the increases in productivity which had taken place, particularly during the year under review, and he indicated that we were to have an increase of productivity of 7 per cent. per annum. What he did not say was what we have paid for this, and before we congratulate ourselves on increases in


productivity I think we should be quite clear about the amount of investment that we have had to find to achieve that result.
The Minister told us that the capital cost per kilowatt had fallen during recent years from £60 to £40. Does the hon. Gentleman expect that trend to continue? The Minister was referring to the capital cost per kilowatt for conventional stations, and I should like to know whether the hon. Gentleman expects that downward trend to continue for conventional stations, and if so, on what grounds, because I believe that it is likely to be reversed.
As the Minister told us, it is clear that the increase in demand has begun to flatten out. He was disarmingly frank when he said that he had no idea of the reasons for that, and I do not think that I would be able to explain it either. What it is important to know is whether there is a likelihood of that flattening out tendency to continue, because it is going to govern the whole investment policy of this industry and, of course, of the Government.
One of the things that I find it very difficult to accept is the way in which in this House, with microscopic attendances, we pay such scant attention to the huge sums of money that are drawn from our overstrained resources. The assumption is that our rôle is that of a lender or provider, which is always a comfortable one, free of any embarrassments.
It is very important for the Government to make it clear that they will watch the position carefully, and not to say, in that time-honoured phrase, beloved of all Government Departments, that the matter "will be borne in mind". These trends will have to be watched very carefully because of the importance of this investment and its effect upon our scarce resources.
I repeat what some of my hon. Friends have said. I congratulate the Minister once again on having had the courage to adopt as his own the policy which we created when in office—the policy of recognition of the financial obligations of the nationalised industries. I do not believe that the Government would have created this policy themselves, but they have adopted it, which took some courage on their part in view of what some of their colleagues had been saying.
The Minister was a little vague in some of the things that he said. He told us that there might be an agreement on the question of connection charges, and he suggested that freedom of choice for the customer was a desirable thing as far as it was economically practicable. I hate the idea of Ministers interfering unduly with the natural processes of competition between these industries, not because the industries are infallible but because this interruption by Ministers is only likely to make matters a good deal worse.
I want to deal with the question of our position in nuclear power. My hon. Friend the Member for Wanstead and Woodford (Mr. Patrick Jenkin) has just produced a learned and expert argument on the respective merits of the two competitors—the boiling water reactor and the advanced gas-cooled reactor. I am sure that all hon. Members will unite in expressing warm congratulations at the fact that the A.G.R. was successful. This is a great boost for British technology, and we should take every opportunity to proclaim it rather than to throw doubt upon it.
What we must do is to tell the Government that things cannot go on very much longer before we have a full debate, with the full facts deployed, and when we can be given some idea of what are the Government's intentions. The intentions of the previous Administration in this matter were based upon a situation which has now been replaced by a quite different one. Therefore, if the Government are still in power in the autumn, we expect them to tell us clearly what their ideas are and to give the House a full opportunity to debate the question of the next step in nuclear power.
I want to deal for a moment with the question of coal consumption by the electricity industry. The Minister said—in one of those soothing speeches which, one feels, are carefully tailored to meet the needs of some of his hon. Friends who were not, on this occasion, sitting behind him—that there would be a need for increasing quantities of coal forever and forever.
I doubt this. The Government would do very well to read most carefully and then read again the remarks made by the Chairman of the Central Electricity Generating Board in Brighton, about


where the limit stops, that the maximum coal consumption of the Generating Board is likely to be nearer 80 million tons than 100 million tons. If the Parliamentary Secretary cannot give us a clear answer—we understand that he cannot expect to be completely right—he may be able to give us a reasonably well-informed guess about what is likely to be the top limit of coal consumption by the electricity industry in the future.
I was very disappointed that we did not hear more from the Minister about large sets and their work and what is the latest view of the industry and the Government on this question. The Minister said that there is a very real prospect of considerable working economies. We must hope that these are realised. Nevertheless, I am sure that the Parliamentary Secretary will not challenge me if I say that we are taking a certain amount of risk in that large sets involve placing quantities of bigger eggs in fewer baskets. I hope that the hon. Gentleman will be able to give us a little information on that subject.
I was astonished that any Minister of the Crown could come down to the House of Commons for a debate on a nationalised industry—following as shortly as this one does upon the statement, which was apparently of great importance, by the Chancellor of the Exchequer—without any details at all, without the slightest indication in his own mind as to what would be the effect of those proposals upon this industry. When I heard these proposals from his right hon. Friend the Chancellor of the Exchequer, my reaction was to think that this was a rather crude hotchpotch put together by a lot of incompetent cooks. I do not want to be misunderstood so I will explain that that word is spelt without the R: C-O-O-K-S.
We have these proposals and today the Minister spoke on behalf of a nationalised industry apparently without the slightest clue of what the effect might he. When I asked him what the effect of these proposals might be on the industry, he said that it would not involve cutting, though it might involve some postponement. But these are largely similar things in practice. He then said that there was no intention to defer anything of an essential nature.
We must hope for something very much better than this, because this shows an utter lack of grip and comprehension. My right hon. Friend the Leader of the Opposition charged the Government in the censure debate on Monday—an absolutely justified charge—with producing policies and then proceeding to deny their validity. This is what they have done. They have made it clear again. I hope that the Minister will be able at least to indicate the kind of lines on which he will proceed in his approaches to the electricity supply industry.
My hon. Friend the Member for Cirencester and Tewkesbury (Mr. Ridley), in his interesting and effective speech, asked once again where the money is to come from—a question which we have asked repeatedly and to which we have had no satisfactory answer. Most of us recall having heard time and again jibes that the Tories never talk about anything but money. Now we very much hope to hear from the Government, embarrassed as they are, how they intend to finance these industries and deal with all the other claims upon our limited resources. My hon. Friend reasonably remarked—and I hope that the Parliamentary Secretary will bear this in mind—that it is not only a question of justifying his expenses within the context of the industry itself but also a question of justification within the context of the economy as a whole.
My hon. Friend raised, and I want to deal with it for a moment, the question of the relationship between the growth rate and the investment plans. To what extent are the Government committed to a 4 per cent. or 3·8 per cent. growth rate? What is the effect likely to be on their investment plans if we fail to achieve that growth rate or anything like it? Clearly it would be a great waste of our resources to embark on a programme which assumed a 4 per cent. growth rate and had as its aim an 18 per cent. margin for the electricity supply industry. I hope that the Parliamentary Secretary will enlighten us on this point.
Some of my hon. Friends mentioned the Energy Advisory Council. I say frankly to the Minister that it is very sensible that Ministers should avail themselves of all the expert advice possible, but it is crazy to expect advice with any kind of unanimity to come from a body of this kind which, as I have said


before, is composed entirely of people who are bound both by duty and by interest to differ from one another. We all look forward with interest to hearing what kind of policy comes out of these deliberations. We have been told often enough that if the Labour Party were returned to power—and that horrifying event has happened—we could expect co-ordinated policies for fuel and for transport. So far we have heard not a squeak of them. It is more with relief than with disappointment that I say that. Still, we shall await what comes out of this machine with a great deal of interest and apprehension.
The hon. Member for Bristol, Central (Mr. Palmer) was good enough to say in a rather condescending way that he thought the Conservative Party had a useful and constructive rôle to play in the affairs of the nationalised industries. In fact, we have taken a much more constructive view of the need and the rôle of the nationalised industries than has the Labour Party, but we should be very glad to welcome any evidence of its awareness of the needs of this industry, and, if it is able to play a constructive rôle in its turn, I shall be well prepared to pay a far more generous tribute to it than we received from the hon. Member for Bristol, Central. I do not understand what he meant by his remarks about more single-mindedness at the top. This industry is fortunate that it has a great single-mindedness at the top. At this stage perhaps I should echo what was said, particularly by my hon. Friends, in tributes to some very remarkable men who bear the responsibilities of this immense industry.
My right hon. Friend the Member for Bridlington (Mr. Wood), with his long experience at the Ministry of Power, paid an eloquent tribute to Sir Ronald Edwards and successive chairmen of the C.E.G.B. I echo every word he said. The industry is fortunate indeed to have the services of such people and I look for rather more willingness on the part of the Government not to take the credit themselves but to let these people have it.
My right hon. Friend the Member for Guildford (Sir R. Nugent) asked for clarification of some remarks of the Minister. I hope that that will be forthcoming. In an imaginative and intelligent

speech my right hon. Friend showed himself well aware of the stresses and strains involved in the expansion of such an immense industry as this. I will remind the Government of some of the questions he asked. What progress is being made on the status proposals? It is clear that the working out of these proposals—the merits of which I in no way challenge—has cost a good deal of money. Has the progress made been worth while? I hope that the Parliamentary Secretary will deal with the point made by my right hon. Friend, when he said that the industry is the life-blood of the community and that the point at which we should aim, from whichever side we look at the matter, is the establishment of a contractual relationship, the breaking of which by strike is impossible, and that the supplies of this vital industry are safeguarded at all costs.
A part of the debate was, naturally, devoted to Yorkshire. I have already referred to the speech of my right hon. Friend the Member for Bridlington, in which he made some important comments to which I will refer. He posed a question which we do not put to the public often enough. It is easy to ask, "Do you, in all circumstances, wish your supplies to be quite safe in the most exceptional winter?" To that question people will reply, "Yes", but they must then be faced with the cost of making that supply secure against any possible eventuality. One of the most important questions to face is the cost of sustaining supplies at time of exceptional peak demand.
I agree with everything my right hon. Friend the Member for Bridlington said about the need for research and the necessity to consider developments which will solve our problems—and that goes for developments which may today be in their infancy. I hope that the Government will do all they can to urge the industry along the road of research and so to deal with some of the problems which otherwise will, in the light of today's technology, be wholly insuperable.
My hon. Friend the Member for Barkston Ash (Mr. Alison) was perfectly right to bring to the attention of the Government and the industry the effect of leviathan power stations going into thinly populated rural areas. The distortion of the local economy by such an event is


considerable. It should be considered by the Government and it is something which must be handled with great care by the C.E.G.B.
Reference has already been made to the anticipations we all feel about the arrival of the Minister's co-ordinated fuel policy. I agree that we now find ourselves facing a totally new fuel situation with the evolution of the advanced gas-cooled reactor, and I hope that in the autumn we shall hear from the Government what their reactions to that situation are.
I fully and warmly agree with the hon. Member for Leeds, South (Mr. Merlyn Rees)—who is, unfortunately, not in the Chamber at the moment—when he says that most estimates on these matters are bound to be wrong. He expressed the need, as he saw it, for a flexible policy. These things are in themselves sufficient for us to accord the hon. Gentleman a very warm welcome, should he ever wish to come to these benches, and if that attitude of mind has spread to hon. Members opposite we shall be very pleased, indeed.
I should like to mention one or two points that are part of the harvest coming from the British Electrical Power Convention at Brighton. We congratulate Sir Ronald Edwards on that gathering, and on taking charge. I would particularly draw the attention of the Government to the caution with which Sir Ronald himself approaches the question of future demand. In page 5 of his Presidential Address, he says:
We are, however, acutely conscious of the fallibility of estimates.
We would be quite wrong, if our estimating goes awry, to put great blame on the industry—these are the chances we all have to take—but what would be wholly wrong would be to doubly insure by increasing our investment beyond what is reasonable or right in this industry in order to produce an immense margin.
I should also like to draw attention to what Lord Hinton said in page 31 of the paper he read at Brighton, in which he nailed the thing down in a very important way. He said:
The electricity industry will win only if it keeps capital and operating costs down; scientific and technological developments are

worth while if they help to do this but anything else that helps is equally worth while even if it is less scientifically exciting.
There is a very real temptation in a technological, modern, go-ahead industry like this to chase attractive will o' the wisps at great expense. I hope that the temptation will be resisted; that heed will be taken of Lord Hinton's counsel and that other and duller means of saving money will not be despised. Lord Hinton also said:
And there are less exciting ways of reducing costs. The Central Electricity Generating Board have about £750 million locked up in capital work in progress and a return of 12 per cent. must be earned on this money, though the works on which it has been spent are earning no revenue. If construction periods were shortened to what is known to be achieved in some other countries and if commissioning could be done on the programmed date, the Board would save about £15 million a year. If the availability of new plant in the early years after commissioning could be increased by ten points per cent. above its present figure, the Board would save about £5 million a year.
They are all good, ordinary commonplace ways of saving money even in an immense industry like this, but they are appropriate. I hope the Government will lose no opportunity of urging on this industry the importance of seeing that the huge investment we are making fructifies to the maximum.
I say frankly and with dismay that I feel the present Administration's approach to the handling of our resources is irresponsible and ill-informed, but, in common with everyone who has spoken in this debate, I say that the progress of this great industry over the years is something which far too many people take entirely for granted. It is a remarkable phenomenon and one for which those responsible deserve the highest praise.

9.30 p.m.

The Parliamentary Secretary to the Ministry of Power (Mr. John Morris): We have heard the hon. Member for Yeovil (Mr. Peyton) criticising "the irresponsibility of the Government" so many times that we begin to wonder what is the main qualification for occupancy of the Front Bench opposite. Hon. Members opposite have chosen as their leader an expert on the organ; perhaps the hon. Member is a barrel organ player, as he has repeated this charge on so many occasions.
Although all of us are looking forward immensely to the Recess, I am sure that we have felt this debate has been very well worth while. We have been dealing with a vital industry which, as the right hon. Member for Guildford (Sir R. Nugent) said, is the lifeblood of the country. I immediately, on behalf of my right hon. Friend and the Government, pay very warm tribute to the leaders of this great industry. The country is very fortunate in having such outstanding public servants in the persons of Sir Ronald Edwards, Lord Hinton and now Mr. Stanley Brown to shoulder what the House undoubtedly appreciates are fantastic burdens. They operate on an immense scale.
It is a privilege to be able to pay this small tribute to them and, indeed, to all the workers in the industry, operating, as my hon. Friend the Member for Bristol, Central (Mr. Palmer) said, on a 24-hour basis. Without them we know not what would happen. They are seldom paid any tribute for the hundred and one occasions when everything goes right, but on the rare occasion, perhaps one time in a million, when something goes wrong, the industry is criticised. The industry is the keystone to our industrial progress today.
It is a necessity to every form of life in the country in whatever type of activity we are engaged upon. Whether one is a domestic consumer, a commercial undertaking, or in any kind of industrial undertaking, it is essential that electricity should be available as easily and cheaply as possible.
Electricity has to be fitted into the pattern of all the other fuel industries. My right hon. Friend has ultimate responsibility for all the fuel industries. He not only has to look at this industry, but at all the other fuel industries together, to take decisions concerning them all having regard to the short-term and the long-term needs. At the end of the day, because of the wisdom of the founding fathers in 1947 and 1948, it is the nation as a whole which comprises the shareholders in the coal, electricity and gas industries.
I have very great pride in the achievements of this great publicly-owned integrated electricity industry. I cannot imagine what would be the state of our

economy today had not that vital decision been taken in the days of the 1945–50 Government to bring the industry into public ownership. Because of the scale on which it operates it has been able to take decisions in the national interest and not in the interests of the few.
During the last few years sales have more than doubled and capacity has nearly doubled. At the present rate we envisage a further doubling of capacity in an even shorter period. This is a great industry. It has an impressive record of expansion. It has a highly commendable record of productivity. All this is the direct result of integrating the whole of our electricity industry under one system, with responsibility in the Minister of Power of the day.
Having regard to the immense demands of industry today, great capital sums are involved. The net assets in the electricity industry stand at £3,000 million already and capital is now needed at the rate of £600 million a year. I listened very attentively to the remarks of the hon. Member for Cirencester and Tewkesbury (Mr. Ridley). Unless I misheard him, he referred to a new capital need over the next five years of between £7,000 and £8,000 million. The hon. Gentleman will correct me if I have misstated him. I am sure that, on reflection, the hon. Gentleman will find that that figure is much too high. As my right hon. Friend the Minister said, capital investment is running at the rate of £600 million a year. The figure over the next five years wil be about £3,000 million, if it continues at this rate. We cannot be more precise than that, because, as hon. Members know, capital investment programmes are subject to annual review, and a review is now in progress. At the end of the day the figure of £3,000 million or so may be about the right figure.
Of this about half will, under present policies, come from the industry's own resources. The remainder will be borrowed from the Exchequer under the Electricity and Gas Act 1963 which was passed by hon. Members opposite when they were in power. I imagine that what the hon. Gentleman has done is to take the figure of £3,000 million and doubled it, because of the other statement that the industry is finding half of the investment from its own resources. The mistake that the hon. Gentleman has made—


it is a mistake which many of us have made in the past—is to confuse borrowing with investment. The hon. Gentleman has arrived at a figure double the amount envisaged for the investment in this industry over the next five years. In other words, the amount to be found from borrowings will be about £300 million a year.
The hon. Member for Yeovil asked me very specific questions about the statement of my right hon. Friend the Chancellor of the Exchequer.

Mr. Ridley: I apologise for perhaps getting the figures wrong. Can the Parliamentary Secretry attempt to answer the question as to where even the £300 million is to come from? We have had no answer to that point.

Mr. Morris: The hon. Gentleman will pardon me, because he exonerated me in his remarks, which I am sure he will read carefully. He said that these were general questions for the Government to answer and not for the Parliamentary Secretary to answer. He said that my job was to ensure that I gave an assurance to the House that every penny needed by the industry would be properly spent.
I have outlined to the hon. Gentleman, first, the amounts involved, and, secondly, the machinery under which the money will be lent to the industry, under the Act passed by the former Administration. As regards the wider question of the financing of publicly owned or any other form of activity which receives its money directly or indirectly from the Government, having regard to his original remarks the hon. Gentleman will not expect me to transgress on the Chancellor's own ground.
The hon. Member for Yeovil was asking what is meant by the postponement of projects in accordance with the statement of the Chancellor of the Exchequer. All I would say on that question is that consultations and discussions are taking place between my right hon. Friend the Minister and the industries about the short-term measures they can take in the light of the Chancellor's statement. I am not in a position to make a detailed statement at this stage. The short answer, which I am sure the hon. Gentleman will be glad to

hear, is that the measures will not affect the electricity industry's plans for power station construction, transmission and distribution.
The impact on the industry's non-industrial capital projects—for example, showrooms and the like—is being discussed with the industry and it is not yet possible to give an estimate of how much this will amount to. Perhaps that answers the questions which were asked by the hon. Gentleman. I cannot at this stage give him any further details.

Mr. Peyton: What the hon. Gentleman is really saying—I take it that he is making this statement after some consultation—is that the effect of these proposals, whatever it may be in other spheres, will be very marginal indeed on the electricity supply industry. They will have no serious effect at all?

Mr. Morris: I am sure that the hon. Gentleman, having spoken from the Dispatch Box on this side of the House, would not expect me to make a statement without adequate consultation. I am sure that he will accept from me that I have taken advice before uttering my words. Surely that cannot be in dispute.
On the second point, I cannot give any firm estimate, but I agree with the hon. Gentleman that so far as the whole of the capital needs of the industry are concerned no great sum seems to be involved. However, these matters are being discussed with the industry and these are the types of projects under discussion.

Mr. Patrick Jenkin: rose—

Mr. Morris: I am sorry, but I cannot give way again now.
The hon. Member for Yeovil asked about the capital costs of conventional stations and asked what would be the likely forecast of costs in the future. I am advised that the trend of capital costs per kW will probably not continue downwards in future at anything like the same rate as in the past. The two reasons for this are, first, that further economies resulting from the size of generating sets will in future be realised more slowly and, secondly, that it may be harder to find suitable sites for generating stations. I cannot give any better estimate and I cannot turn myself into a better prophet than that.
Questions were asked by the hon. Member for Cirencester and Tewkesbury about the safety margin and the raising of that margin from 14 per cent. to 17 per cent. I am not sure whether the hon. Member was criticising the margin and saying that it was excessive. Perhaps all he wanted was an explanation, and I am sure that I can give him that. The original margin which the industry had was criticised by the Select Committee, and perhaps I may read briefly the final comment of the Select Committee. It appears on page 42 of the Report, and is as follows:
After the overhaul of forecasting methods and the reconsideration of margins of capacity, Your Committee consider that the industry should aim to achieve a security of supply at least equal to that enjoyed in other advanced countries.
That is the aim of the present exercise, to increase the margin and to bring it up to 17 per cent. Of course, that figure of 17 per cent. is set five years in advance, and it not only has to take into account the need to have an adequate margin but it has to take into account also the risk, that has been faced, of underestimating the load at that time, five years ahead.
I would say to the House that this margin is needed. It is in accord with the spirit of the recommendations of the Select Committee and it is reasonable having regard to the margins in other countries. I am sure that at the end of the day, in the light of these considerations, it will be worth while.
Other questions were asked by a number of hon. Members, including, in particular, the hon. Member for Cirencester and Tewkesbury, on whether the generating capacity will be needed. The present forecast of the industry is based on the Government's own view of the growth of the economy and their assessment of the needs of a detailed part of it. If there is this growth, which I hope will be achieved, all this capacity will certainly be needed.
My right hon. Friend dealt in some detail with the issue of amenities and their preservation, about which a number of questions were asked. He gave a number of details of the very large amount involved in the undergrounding of cables. All the points which have been made in the debate on this subject will be borne in mind. There will always

be an attempt to ensure the preservation of amenities as far as possible, having regard to the vast sum of money involved.
My hon. Friend the Member for Bristol, Central raised a number of points First, he raised the question of fuel duties and of gas being let off scot-free, in his own words, I am sure that my hon. Friend will not expect a reply from me tonight in that this is a fiscal matter where there obviously would have to be consultations between my right hon. Friend and the Chancellor of the Exchequer, and my hon. Friend's questions might be more appropriately addressed to the Chancellor.

Mr. Palmer: I take for granted that my hon. Friend's Department is making strong representations to the Chancellor of the Exchequer on this point.

Mr. Morris: My hon. Friend will not expect me to tell him what are the kinds of representations which are being made from time to time between one Minister and another.

Mr. Ridley: Why not?

Mr. Morris: I am sure that if the hon. Member for Cirencester and Tewkesbury had held office, as has his hon. Friend the Member for Yeovil he would accept that as being a correct indication of what happens.

Mr. Peyton: indicated dissent.

Mr. Morris: My hon. Friend the Member for Bristol, Central said that the expansion of nuclear capacity should be a matter largely for the commercial judgment of the Central Electricity Generating Board and not a matter for the Atomic Energy Authority. I appreciate why my hon. Friend makes this remark, but perhaps, on reflection, he will consider that it is not a matter for the C.E.G.B. or the A.E.A. It is a matter for my right hon. Friend in that, at the end of the day, it is he who has to approve the capital investment of the industry, and it is not solely even his responsibility. It is also a matter for the Chanceller of the Exchequer, the Minister of Technology and, it may well be, other Ministers whom I cannot remember offhand. It is certainly not a matter only for the C.E.G.B. or the A.E.A.
My hon. Friend also asked a number of questions about the structure of the


industry—the area boards, the Electricity Council, and the C.E.G.B. All I would say is that this system seems to be working adequately at the moment, but no system can be perfect and I would be interested in any representations which my hon. Friend might make from time to time.
I have dealt with some of the points raised by the right hon. Member for Guildford. Like several hon. Members, he paid a great tribute to the British nuclear energy industry. It is a matter of great pride to us all that the tender for the Dungeness B station has been successfully arranged. The right hon. Gentleman told the House of his pride when he visited British nuclear power stations. I hope to visit one myself next Monday at Trawsfynydd, in the Principality. It is a matter of great pride to the whole House that, as a country, we are playing such an important rôle in these matters.
The right hon. Member for Guildford, as did his hon. Friend the Member for Yeovil, referred to the Status Scheme for manual workers. It will be recalled that the Pearson Report commended such a scheme. All I can say at the moment is that we are in the early days of the Scheme, and I am advised that it is progressing reasonably well. I cannot add anything further at this stage.
My hon. Friend the Member for Wakefield (Mr. Walter Harrison) asked several questions about contracting. Contracting has never wholly been done by the boards, and contracting in general, looking at all the boards, has not been reduced. If my hon. Friend has any points to make on this aspect of the industry's activities, I shall be delighted if he will call to see me to speak further on these matters.
Several points were raised about the price tariff of the industry, whether the views of the customer were adequately made known, and what the rôle played by the Generating Board was. The 12 customers, through the chairmen of the Area Electricity Boards, are represented on the Electricity Council, along with the independent members. The 12 chairmen are the most interested parties of all, and the Generating Board comes to the Electricity Council to justify itself. All the consumers' consultative councils are able

to make representations to the Electricity Council—one has done so recently—and ultimately they have the procedure of appeal to the Minister.
Various observations were made on the subject of research. All hon. Members are agreed on the importance of research and the adequate spending of money in the industry for this purpose. My right hon. Friend is satisfied with the programmes to date, and he watches this matter very closely. Recently, greater co-operation and co-ordination between the gas, electricity and coal industries has been instituted. All three have joined together to co-operate further, and this is an innovation which has been started by my right hon. Friend.
In addition to some points about research, which I have already covered, the hon. Member for Sheffield, Hallam (Mr. John H. Osborn) made a comment about the short notice of this debate. All I can say is that the debate was arranged in the normal way through the usual channels. If any trade associations have not been able to make their representations in time, there is the usual machinery of the consultative councils open to them, and my right hon. Friend or one of his officials is always at the disposal of trade associations if anyone is minded to make representations.
I was not present when the hon. Member for Barkston Ash (Mr. Alison) spoke, but I understand that he made a number of references to the use of labour by private contractors of the Central Electricity Generating Board, advocating—I may have the wrong impression here, as I was not present—what appeared to be the revolutionary doctrine that there should be ministerial intervention as regards the kind of labour employed by private contractors vis-à-vis the C.E.G.B. I will read carefully the hon. Member's remarks in the morning. If that was what he was advocating, it has wide implications and I was surprised to hear his remarks. I had a Question some weeks ago from the hon. Member and I tried to reply fairly fully to him. If anything further has been dealt with which is outside the Question that was asked, I will write to him in due course.
A number of questions were asked by the hon. Member for Orpington (Mr. Lubbock). He asked what would be the


effect of recent developments on the second nuclear power programme. The answer is that the Government undertook that after the Dungeness tenders had been examined, they would put in hand a reappraisal of the nuclear power programme. This they are doing and we will let the House know the outcome as soon as possible. The review will cover the size, cost and composition of the programme.
Among his other questions, the hon. Member asked how things were going since maximum prices for the resale of electricity were fixed, whether any cases had been taken to court and whether my right hon. Friend was satisfied that consumers knew adequately about the arrangements. As the hon. Member knows, maximum prices have been in force only since 1st July and it is much too early to pronounce upon progress. I have asked the chairmen of the consultative councils to let me know how the new arrangements are going. We shall certainly be prepared to look into abuses and to reconsider the question if it is shown that there is genuine need for strengthening the means of enforcement.
A number of other questions remain to be dealt with, but there is not the time for me to do them justice. I listened intently to the remarks of the hon. Member for Wanstead and Woodford (Mr. Patrick Jenkin) when he compared the tenders which had been submitted for the Dungeness B station with some American tenders. I, too, read the series of articles in the Daily Telegraph by Mr. Duncan Burn. All I would say is that the Dungeness B tenders were competitive under British conditions. When Mr. Burn compares

the price of the British tenders with what is done or may be done in America, he is not really comparing like with like. There may well be quite extraneous matters, which have little to do with the nuclear field alone, in the tenders that were put in for the British installation.

Mr. Patrick Jenkin: rose—

Mr. Morris: I am sorry that there is not time to give way.
I have looked carefully into the matter because I had forewarning that the hon. Member would raise it during the debate. All I would say is that we are comparing like with like. These contracts for Dungeness were put out to competitive tender. I am sure that there is no hon. Member opposite who would not strive to maintain that kind of system.
We are dealing with a great industry which has done great service to the country. We are dependent upon it day and night for the continuance of our economy. I pay tribute once more to the enormous amount of work that has been done over the years by the servants of this industry. I commend the Report to the House.

Question put and agreed to.

Resolved,
That this House takes note of the Report and Accounts of the Electricity Council for 1963–64 (H.C. No. 331) and of the Central Electricity Generating Board for 1963–64 (H.C. No. 332).

BUSINESS OF THE HOUSE

Ordered,
That the Proceedings on Government Bills may be entered upon and proceeded with at this day's Sitting at any hour, though opposed.—[Mr. W. Howie]

Orders of the Day — HIRE-PURCHASE BILL [Lords]

Considered in Committee.

[Sir SAMUEL STOREY in the Chair]

Clauses 1 to 58 ordered to stand part of the Bill.

Clause 59.—(TRANSITIONAL PROVISIONS, CONSEQUENTIAL AMENDMENTS AND REPEALS.)

Question proposed, That the Clause stand part of the Bill.

10.0 p.m.

Mr. Graham Page: This Clause is a blot on this Consolidation Bill, and I think it is a blot on the precedents for consolidation Measures. As the Long Title includes the words
with corrections and improvements made under the Consolidation of Enactments (Procedure) Act 1949
I think that under the rules of order I am precluded from moving any Amendment even as to the date of commencement of the Bill, and therefore the only form of attack I can make on this thoroughly objectionable part of the Bill is to oppose this Clause, and I do so. I think the Government have been thoroughly lax and lazy in putting it into the Bill.
Subsection (4) amends a number of statutes which are set out in Schedule 5, and the first nine of those statutes are general statutes in which hire-purchase agreements happen to be mentioned and the relevant Sections have been amended so as to bring them into line with this Bill, but the tenth statute in the Schedule of Enactments Amended is the Hire-Purchase Act, 1964, the very Act which one might assume was the main subject of this consolidation. In fact it is being amended and not repealed and only part of it is being consolidated in this Measure.
Clause 59, and in particular subsection (5), repeals the statutes specified in Schedule 6, and in Schedule 6 we see that the Hire-Purchase Act, 1938, is wholly repealed, the Hire-Purchase Act, 1954 is wholly repealed, but the Hire-Purchase Act, 1964, is only partly repealed, and in that partial repeal there

appears a reference to the Advertisements (Hire-Purchase) Act, 1957. That Act does not appear itself either in the Schedule of Enactments Amended or in the Schedule of Enactments Repealed so it will remain in force after this so-called consolidation Bill becomes operative.
What emerges from this is that Clause 59 ensures that this consolidation Measure leaves untouched two important branches of hire purchase law. The first is the law relating to the unauthorised disposal of motor vehicles by hirers under hire purchase agreements, that Clause contained in Part III of the Hire-Purchase Act, 1964.
Clause 59 will, I submit, cause the utmost inconvenience by, as it were, leaving a part of the law which is being consolidated and a part of the statute which is being consolidated out on a limb, out in the cold, a sort of Cinderella of consolidation. I know that Part III of the 1964 Act, which deals with the disposal of hire-purchase motor vehicles, is concerned with the rights of third parties and not parties to a hire-purchase agreement. But that does not take it out of hire-purchase law. Would not anyone, whether he is a layman or a lawyer, expect to find that subject in this consolidation Act?
The second point which emerges from the Schedules and subsections (4) and (5) of Clause 59 is that Clause 59 ensures that the Advertisements (Hire-Purchase) Act of 1957 remains untouched. Again, anyone, either a layman or a lawyer, would expect to find that branch of hire-purchase law within this consolidating Measure. I know that it does not directly affect the civil rights as between the parties to a hire-purchase agreement; it creates certain offences. But, none the less, it is an integral part of the hire-purchase law, and one cannot help suspecting that there has been undue haste to get the Measure on to the Statute Book in order, perhaps, to boost the Government's much publicised legislative score of so many statutes per so many dynamic days. To drag in consolidation Bills in that is unfair to members of the public which have to look at the Bills and try to understand the law from them.
Clause 59 is even more suspect in that respect, when one turns to subsection (1). It says:
This Act (including the repeals effected by this section) shall not have effect in relation


to any hire-purchase agreement, credit-sale agreement or conditional sale agreement made before 1st January, 1965.
Not only is the independent existence of two important branches of hire-purchase law preserved by Clause 59, but the whole of the existing statutes relating to hire-purchase law is preserved in respect of agreements which were made before 1st January, 1965.
Would one suspect from the long title of the Bill that that part of the law was being excluded from the Bill? It is
An Act to consolidate certain enactments
and not the law relating to certain agreements. I must say that Clause 59, subsection (1) seems to me to leave consolidation in chaos and confusion.
In any ordinary statute dealing with the form and validity of contracts, it is normal to say that the reforms made will apply only to contracts after the date when the Bill comes into operation and will not apply retrospectively to contracts made prior to the Act. That is what was done in the Hire-Purchase Acts of 1938, 1954, 1964. As a result, there are now three codes of hire-purchase law. First, there is the law as it was contained in the Hire-Purchase Acts of 1938 and 1954 applicable to hire-purchase agreements made before 1st January, 1965, being of a kind unaffected by the Hire-Purchase Act, 1964.
Then there is the second code of hire-purchase law which again is contained in the 1930 Act and the 1954 Act and again is applicable to pre-1965 hire-purchase agreements, to those agreements which are of a kind which are affected by certain provisions of the Hire-Purchase Act, 1964. Finally, there is the third code of hire-purchase law as contained in the 1938 and 1954 Acts, as amended by the 1964 Act, as applied to hire-purchase agreements made on or after 1st January, 1965.
It is only the third of those three codes which is consolidated in the Bill, and anyone who has a pre-1965 hire-purchase contract and who wants to know the law relating to it will have to refer to repealed Acts which, for all I know, may be out of print very soon. They are certainly repealed by the Schedules to the Bill so far as future contracts are concerned, and Clause 59, by keeping the other codes alive in other

statutes, destroys the proper working of consolidation. Of course those codes must be kept alive. We cannot, in a Consolidation Bill, after the law relating to contracts already made. The hire-purchase agreements may last for four, five, six, or even more years, and the pre-1965 code will be needed for at least that length of time.
The proper consolidation device for doing this is to set out in a Schedule to the Consolidation Bill the law as it applies to the different kinds of contract. In the present case two Schedules would have sufficed, containing the first two codes that I mentioned. The Schedules would merely say that for such and such a contract Clauses so and so of this consolidation Bill apply, but the following are substituted for the remaining Clauses of the Bill.
But Clause 59 discards that device. No one can rely on this Consolidation Bill as containing the law relating to all hire-purchase agreements. Let us suppose that one is dealing with a contract made last year. One will still have to collect together the law relating to that contract, which will be in the 1938, 1954, 1957 and 1964 Acts. If no consolidation had taken place, that would be so, and one could not complain, but the whole point of consolidation is to get the law together into one instrument, and the existence of a Consolidation Bill such as the one before the Committee is misleading, because one looks at the Schedule and sees the enactments repealed, the 1936 Act gone, the 1954 Act gone, the 1964 Act nearly gone, and then there is the trap. There is Clause 59 which keeps the old law in existence in respect of contracts made prior to 1st January, 1965.
What is going to happen about two or three years hence? Will Her Majesty's Stationery Office still print these repealed Acts which will still apply to pre-1965 contracts? I am sure that the device of Schedules for obsolescent laws should have been adopted in this case. I do not think that such schedules would have been either long or complex in this case, but even if they were, that is not a reason why they should be omitted. In fact it is probably a reason why they should be included, because if they tend to be long and complex, surely it is an admission that the law which is left unconsolidated by the Bill is itself long and


complex, which is a very good reason for consolidating it and bringing it into the Bill? I want to quote two sentences from the OFFICIAL REPORT. The first, on 28th July, reads:
It is far better, not only for the legal profession but also for the general public, to be able to find the whole law on a subject in one instrument, preferably in one statute."—[OFFICIAL REPORT, 28th July, 1965; Vol. 717, c. 635.]
On 2nd August there was this passage:
It is for the convenience of the public and those members of the public who are particularly affected, so that if they want to find the law they can find it in a single Instrument."—[OFFICIAL REPORT, 2nd August, 1965; Vol. 717, c. 1222.]
Both those gems of wisdom fell from the lips of the hon. and learned Solicitor-General within the last week. Yet he asks the Committee to accept Clause 59, which wholly fails to achieve that object; in fact, it does just the opposite. If the draftsman had been given more time I am sure that he would have adopted the normal course and produced a proper consolidation Measure.
The passion of this Government for trying to advertise its dynamism by chalking up a large score of statutes going through the House has led to a rush over this Consolidation Bill, and has meant that the draftsman has failed to consolidate the law properly. He has left out of the Bill a vital part which any member of the public having to deal with this subject would expect to find in it.

The Solicitor-General (Sir Dingle Foot): No one will accuse the hon. Member for Crosby (Mr. Graham Page) of a lack of diligence. We are indebted to him, because he has brought to our attention, night after night, features of various consolidation Measures. His first complaint was that this matter had been rushed—that we had not taken sufficient time. Why is it that we bring forward this Consolidation Bill at this time? It is to meet an undertaking which was given in the former Parliament by the right hon. Member for Bexley (Mr. Heath). In this respect the hon. Member's quarrel is not with us; it is with his own Leader.
I remind the House what was said by the right hon. Gentleman on 18th February, 1964, dealing with the question of hire purchase. He said:

We have tried to hold a balance between the interests of purchasers, on the one hand, and traders, on the other. I hope the House will agree that at this stage the Bill gets the balance right. It is obvious from what the hon. Member for Kilmarnock (Mr. Ross) has said that when the Bill becomes law it will be appropriate to consider the consolidation of legislation dealing with hire purchase, and I hope that this can be done."—[OFFICIAL REPORT, 18th February, 1964; Vol. 689, c. 1048.]
This is precisely what has been done.
The hon. Member made various criticisms of the Bill, which were really directed at the Consolidation Committee. Neither the hon. Member nor I were members of that Committee, but various colleagues of the hon. Member, including the hon. and learned Member for Darwen (Mr. Fletcher-Cooke), were. The hon. Member is saying that the Committee has not adequately done its work, and I feel that I must come to the defence of that Committee.
The hon. Member for Crosby has failed to observe what the Bill is about. He has complained that we have not included in it all the provisions in the Hire-Purchase Act, 1964, and in the Act of 1957. But certain parts of the 1964 Act deal with matters with which we are not here concerned. Part III of that Act deals with motor vehicles on hire purchase. The law, which is set out in Part III of that Act, does not in any way affect the rights as between the hirer, the owner and other parties to a hire purchase agreement. That is what we are concerned with in this Measure.
We are concerned simply with the contractual relations between the hirers and the purchasers and the other parties to the contract. That is what this consolidation Bill is about. Similarly, the Act of 1957 deals with advertising, which, again, is something which is not done in this Measure. Under the 1964 Act, Part 3 is concerned with the sale of goods. It provides the exceptions to what lawyers know as the nemo dat rules and the objective of that Part 3 is to regulate the legal position as between the owner under a hire-purchase agreement and the person who has acquired the motor car, or whatever it may be, in good faith. That is to say, we are assimilating that branch of the law to the law relating to market overt. Part 4 of the 1964 Act improves the Act of 1957 in relation to advertising.
These are entirely different provisions, which are in no way covered by the Bill. We are dealing with a particular aspect of hire purchase, that is, the contractual rights between the parties to hire-purchase contracts. That is the only respect in which the law is consolidated.
The other matter which the hon. Member raised was Clause 59. He criticised the Clause—as he did on Second Reading—in particular, because it refers to the date, 1st January, 1965. After all, the task of a Consolidation Bill is to consolidate the law and, in this case, it is simply consolidating the law as it was passed by Parliament under the last Government in 1964. The 1964 Act made certain considerable changes in the law regarding hire purchase and, of course, there had to be a date when those changes came into operation.
The date which is set out in the 1964 Statute is 1st January, 1965. There is nothing novel about this. For contracts before 1965, the law is the law as it then existed. After 1st January, 1965, the law governing hire purchase is the law as it is set out in the Act of 1964 and as it is consolidated in this Act. That is a perfectly natural and logical distinction. Therefore, I respectfully suggest that there is no substance whatever in the hon. Gentleman's criticisms.

Mr. Graham Page: The Solicitor-General has referred to an undertaking given by the then Government on the passing of the 1964 Act. I am sure that, had those who gave the undertaking—particularly the right hon. Gentleman who gave the undertaking—had the conduct of the Consolidation Bill he would have seen that it really did consolidate the law relating to hire-purchase agreements, and not only part of the law. He would have provided for a proper consolidation Bill. The hon. and learned Gentleman said that I was complaining of an offence by the Joint Committee. Not at all. The Joint Committee is not charged with reporting to the House what is not being consolidated. It is for this Committee of the House to consider that. This Committee is entitled to consider the subjects which are being consolidated and which ought to be consolidated under the long title of the Bill.
The hon. and learned Gentleman explained that the consolidation is intended

to be only one relating to the contractual rights between the parties, but anyone reading the Long Title and the Short Title of the Bill might assume—I think, correctly—that it deals with hire purchase law as a whole, that it consolidates hire-purchase law. This is why I say that the Bill is misleading in calling itself a Consolidation Bill and not consolidating the whole of the law.
As the Solicitor-General said, the task of a consolidation committee is to consolidate the law, but what it has done in this case is to consolidate only that law relating to agreements entered into on or after the 1st January, 1965. That is my complaint about it. It only consolidates the law relating to certain agreements, and it is thereby misleading to the public in that it does not by means of Schedules, which are common in Consolidation Bills, deal with the obsolescent law relating to previous agreements. I still think that the Clause is a blot on a Consolidation Bill.

Question put and agreed to.

Clause ordered to stand part of the Bill.

Clauses 60 to 62 ordered to stand part of the Bill.

Schedules agreed to.

Bill reported, without Amendment; read the Third time and passed, without Amendment.

Orders of the Day — HIRE-PURCHASE (SCOTLAND) BILL [Lords]

Considered in Committee.

[Sir SAMUEL STOREY in the Chair]

Clauses 1 to 56 agreed to.

Clause 57.—(COMMENCEMENT.)

Question proposed, That the Clause stand part of the Bill.

10.29 p.m.

Mr. Graham Page: I have the same objection to this Clause as to Clause 59 in the previous Bill, namely, that it excludes from consolidation the law relating to pre-1965 agreements. As the Long Title does not include the magic words about corrections and improvements, I believe that I could have devised an Amendment which would have


been in order in this case, but it would be a grave English constituency Member who endeavoured to amend a Scottish Bill, and it would also have involved me not only in amending the Clause, but in drawing the Schedules of obsolescent law myself, and I am afraid that I shied from that.
I will content myself with referring the Committee to my previous criticism of this kind of Clause and with the comment that I think the inclusion of it in a consolidation Bill is unfair to those who are involved in hire-purchase transactions.

10.30 p.m.

The Secretary of State for Scotland (Mr. William Ross): The hon. Member for Crosby (Mr. Graham Page) will appreciate from the speech of my hon. and learned Friend the Solicitor-General that it was to me that the former President of the Board of Trade gave a pledge that there would be consolidation. If the hon. Gentleman had any knowledge of what the law of Scotland was like in regard to hire purchase, he would appreciate why not one Scottish Tory is here to support him in his protests on this matter. The law is now pellucid com-pared

with what it was and I am sure that anyone who is interested in hire purchase matters will welcome the Clause. The Title does not refer to "all enactments" but "certain enactments".

Mr. Graham Page: I thank the right hon. Gentleman for his remarks. I did refer to the phrase "certain enactments" in connection with the Title of the previous Measure. I think that it should have contained the other phrase to make the matter clear to the public. I will merely quote some words used by the Solicitor-General in the House the other night, when he said:
Oliver Cromwell once described the laws of England as 'a tortuous and ungodly jumble'."—[OFFICIAL REPORT. 2nd August, 1965; Vol. 717, c. 1221.]
I suggest that the law of Scotland could be similarly described.

Clause ordered to stand part of the Bill.

Clause 58 ordered to stand part of the Bill.

Schedules agreed to.

Bill reported, without Amendment; read the Third time and passed, without Amendment.

Orders of the Day — SALMON AND FRESHWATER FISHERIES BILL [Lords]

Order read for resuming adjourned debate on Question [2nd July]. That the Bill be now read the Third time.

Question again proposed.

10.33 p.m.

Colonel Sir Tufton Beamish: I am glad to have this opportunity to make a few remarks about the Bill. I would, at the outset, like to say how greatly I appreciate the assistance I have had from the Government during the passage of the Measure. I am glad to see the Joint Parliamentary Secretary in his place and I hope that he will comment on the Measure before we give it its Third Reading, as I am sure we will.
The Bill started life as a Private Member's Measure in this House. I drew a low place in the Ballot and the Bill ran into some minor difficulties. As a result, it was transferred to another place, where it was skilfully handled by the noble Lord, Lord Egremont, helped on by the Joint Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food in another place. It was owing to a misunderstanding that the Bill did not get its Third Reading in this House. Now that the difficulty has been cleared away, we are having what I think will be a short Third Reading debate.
I will briefly describe what the Bill sets out to achieve. It is an all-party Measure and has had the support of the three parties in the House throughout its journey. It has also had the backing of the River Authorities' Association and widespread backing in the country. There has been no opposition at all and, as I have indicated, it has throughout had the blessing of the Government, for which I am grateful.
The Bill is based on Chapter 14 of the Bledisloe Committee's Report, in which the Committee recommended very strongly indeed that the penalties for persons killing fish by illegal methods—by which I mean the use of explosives, electrical devices or poisons—should be substantially increased. There is a common factor in these three methods; their indiscriminate character. There is nothing selective about killing fish by any of

these methods. Those who have indulged in these indiscriminate methods have had rich hauls and have made fat profits, and have caused very severe damage to many rivers in England and Wales, as they had previously in Scotland. If these methods were to be allowed to continue with impunity for two or three years more, some of the finest salmon and trout rivers in England and Wales could be destroyed for a long time to come.
The most serious method used by these poachers is the use of poisons, particularly a poison called Cymag—well known to many right hon. and hon. Members as one which is legally and properly used for the destruction of pests, particularly rabbits and rats. There is clear evidence that, in one night, gangs of poachers using this poison can make as much as £300, £400 or £500. I have amassed evidence from Cumberland, Westmorland, Lancashire, the West Country and Wales, but these methods could be used anywhere that the poachers chose.
The main object of the Bill is to make the punishment fit the crime, and it is my hope and expectation that if and when it becomes law it will nearly eliminate the scientific gang poaching that has been going on for a number of years in England and Wales. The Bill is modelled on the Scottish Act of 1951, which was wisely passed by a Labour Government and has been very effective in Scotland.
The Bill would become operative within three months of its enactment. It repeals and re-enacts with amendments Section 9 of the Salmon and Freshwater Fisheries Act, 1923—which, after all, is now more than 40 years old. At the same time, it somewhat widens the scope of that Section in order to improve the chances of conviction. It also sets out to strengthen the enforcement powers held by river authorities.
Penalties are the nub of the Measure. The penalties in Section 9 of the 1923 Act are today derisory—so much so that they have ceased to deter at all. Very few prosecutions are now brought under the Section, and a great deal of poaching has been able to continue with impunity. The Bill's object is to provide penalties that will ensure that there is a real deterrent.
Under the 1923 Act, the maximum fine for poaching of this scientific and rather wicked character is £50, which I believe is the maximum fine one can incur for unintentionally parking one's car without sidelights. The Bill provides a penalty on summary conviction of imprisonment of up to three months or a fine of up to £50; or, on a second offence, for a fine of up to £100, or, in either case, both imprisonment and fine. It provides, on indictment, for imprisonment for up to two years or for a fine for which no maximum is laid down, or for both. In its penalties on summary conviction and on indictment the Bill follows lines similar to those already incorporated in the Scottish Act of 1951.
The Measure also provides, as I think is important, for certain forfeitures. On summary conviction, it provides for the forfeiture of fish and instruments, and on indictment it provides also for forfeiture of vessels and vehicles. Here, again, the Bill follows broadly the valuable precedent set in the Scottish Acts, which have been thoroughly effective.
These are the objects and effects of the Bill, which naturally, includes consequential amendments to other Acts. It is not just a rich man's salmon fishing charter. It may come as a surprise to some people to know that last year river boards issued more than 50,000 licences for salmon and trout fishing. It may come as even more of a surprise that in England and Wales last year more than 400,000 licences were issued for people who wished to fish for non-migratory fish, which include trout. Salmon and trout fishing is enjoyed by a very large number of people of all sections who get an enormous pleasure from it, and it also provides a great tourist attraction. England and Wales are justly famous for some of the best salmon and trout fishing in the world. It is a national asset to us.
I repeat my thanks to the Government for facilitating the Bill to its Third Reading and I hope that it will be really effective in ending the wicked and selfish behaviour of a very small number of people who, if that behaviour went unchecked, would destroy this national asset.

10.42 p.m.

The Joint Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food (Mr. John Mackie): As the hon.
and gallant Member for Lewes (Sir T. Beamish) said, this is a Private Member's Bill which he introduced in this House. I am sorry that it was blocked here, but I am glad that in another place we were able to see it go through without opposition. It is an all-party Bill which is backed by the river authorities.
I thank the hon. and gallant Member for his kind remarks about the Government giving assistance to and supporting the Bill. The Bill extends the provisions of the Salmon and Freshwater Fisheries Act 1923, against the more obnoxious forms of fishing by means of explosives, poisons and electric shock. The hon. and gallant Member did not mention paragraph (c) of Section 9 of that Act, which makes liable any person who
unlawfully or maliciously cuts through, breaks down or otherwise destroys any dam, floodgate or sluice with intent thereby to take or destroy fish.
Little did I think in my youth that I would stand at this Box to help through Parliament a Bill dealing with actions in which I took part. I did not do it for huge profits but for the pot, when I shut a dam or put down a sluice. I welcome the Bill and hope that it will get its Third Reading.

Question put and agreed to.

Bill accordingly read the Third time and passed without Amendment.

Orders of the Day — CRIMINAL PROCEDURE (ATTENDANCE OF WITNESSES) BILL

Lords Amendments considered.

Clause 2.—(SUMMONS TO WITNESS TO ATTEND COURT OF ASSIZE OR QUARTER SESSIONS.)

Lords Amendment No. 3: In page 2, line 28, leave out subsection (4).

10.43 p.m.

Mr. Martin McLaren: I beg to move, That this House doth agree with the Lords in the said Amendment.
This is a paving Amendment leading to Lords Amendment No. 4. I suggest, Mr. Deputy-Speaker, that it might be convenient to consider it with Lords Amendment No. 4.

Mr. Deputy-Speaker (Dr. Horace King): Yes, if the House wishes.

Mr. McLaren: When the Session began I never thought that I should be responsible for an Order of the Day starred on the Order Paper as a Government Order of the Day, or that the Government would suspend the rule at ten o'clock partly for my benefit. I am very much obliged to the Government for their kindness in finding time for these Lords Amendments to be considered.
The new Clause repeats Clause 2 (4) which is to be deleted and puts an end to the issue of subpoenas in a further case, namely, where a witness summons can be issued to compel the attendance of a witness at a magistrates' court under Section 77 of the Magistrates' Courts Act, 1952. The material words of that Section are:
Where a justice of the peace … is satisfied that any person … is likely to be able to give material evidence, or produce any document or thing likely to be material evidence, at an inquiry into an indictable offence by a magistrates' court … or at the summary trial of an information or hearing of a complaint by such a court … the justice shall issue a summons … requiring
the attendance of the witness.
That is the ordinary procedure, but there is reason to think that the Crown Office subpoena has been used as an alternative procedure in cases where the party issuing the subpoena knows that he would fail to satisfy the magistrates that the witness could give any material evidence, because the Crown Office subpoena can be obtained without him having to show that. It is true that the witness may then issue a summons. He can apply to the High Court to set the subpoena aside on the ground that he would be unable to give any material evidence.
In practice, some difficulty arises in cases where the party delays serving his subpoena until it is too late for the witness to make the necessary application to the Divisional Court. It seems right that the parties should have to use the procedure under the Section of the Magistrates' Court Act, as a person ought not to be exposed to the trouble of attending a court to give evidence, unless it can be shown that he can give some material evidence.
The Amendment was suggested by the Lord Chief Justice, who, in Committee in another place, spoke in its support. It may be a comfort to Ministers to think

that they may be the main beneficiaries of this provision, because it has been known for subpoenas to be served on Ministers on inadequate grounds.

The Minister of State, Home Office (Miss Alice Bacon): I think that this is the last piece of legislation which will be put before the House before the Summer Recess. It is rather remarkable, after all the months we have had of long sittings, of all-night sittings and controversy, that this should be a Bill introduced by an Opposition Whip and given Government time after ten o'clock at night.
The Bill is based on the Sixth Report from the Criminal Law Revision Committee. The proposal in the new Clause was not among the recommendations of that Committee. As it relates to proceedings at magistrates' courts, it was not within their terms of reference which related only to attendance at courts of assize or quarter sessions. But this Amendment was suggested in another place by the Lord Chief Justice who supported it in Committee, and I agree with the hon. Gentleman and accept the Amendment.

Question put and agreed to.

Subsequent Lords Amendment agreed to.

New Clause B.—(POWERS OF PARLIAMENT OF NORTHERN IRELAND.)

Lords Amendment No. 5: In page 5, line 31, after Amendment last inserted, insert new Clause B:
B. Notwithstanding anything in the Government of Ireland Act 1920 the Parliament of Northern Ireland shall have power to make laws for purposes similar to the purposes of this Act.

Mr. McLaren: I beg to move, That this House doth agree with the Lords in the said Amendment.
This proposed Clause enables the Parliament of Northern Ireland to pass laws for purposes similar to any of the purposes of this Bill. It is necessary to have a provision on these lines as any matter relating to the Supreme Court of Northern Ireland is a reserve matter on which the Parliament of Northern Ireland, in the absence of further statutory provision, is unable to legislate owing to the provisions of the Government of Ireland Act, 1920.

Question put and agreed to.

Clause 8.—(SHORT TITLE, CONSEQUENTIAL AMENDMENTS AND REPEALS, COMMENCEMENT AND EXTENT.)

Lords Amendment No. 6: In page 6, line 6, leave out from beginning to "does" in line 7 and insert:
(5) Any reference in this Act to any enactment shall be construed as a reference to that enactment as amended, and as including a reference thereto as extended or applied, by any other enactment.
(6) Section (Powers of Parliament of Northern Ireland) extends to Northern Ireland and so much of this section and Schedule 2 to this Act as relates to the Writ of Subpoena Act 1805 extends to Scotland and Northern Ireland, but, save as aforesaid, this Act

Mr. McLaren: I beg to move, That this House doth agree with the Lords in the said Amendment.
The new subsection (5) in this Amendment is consequential on Amendment No. 4, to which we have already agreed. Provisions in this form are the favourites of parliamentary draftsmen. The procedure under Section 77 of the Magistrates' Courts Act has been extended to the issue of witness summonses in proceedings in magistrates' courts under other Acts, and this subsection brings within the scope of the Bill all such other proceedings.
The new subsection (6) is consequential on Amendment No. 5, to which we have already agreed.

Question put and agreed to.

Remaining Lords Amendments agreed to.

Orders of the Day — TAXICABS (SIX-MILE LIMIT)

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Fitch.]

10.54 p.m.

Mr. Dudley Smith: It seems amazing that the six-mile taximeter limit, which was introduced in the last century with the express intention of stopping cab horses from exploitation, is still in existence, particularly as cab horses now seem to have departed from the scene.
I am sure that the Joint Under-Secretary of State for the Home Department, who, very kindly, is to answer the debate, will agree that this limit is now very much out of date. Indeed, since the introduction

of the internal combustion engine and the expansion of mechanised transport, London has grown considerably in size, and its communications are vital. A six-mile limit in the Metropolis now, particularly with the suburbs as they have developed, is totally inadequate.
All of us have occasion from time to time to use London taxis, and, on the whole, it can be fairly said that the service is a reliable one with very high standards. The hon. Gentleman's Department has gone to great trouble to maintain this high standard, as have the Metropolitan Police. The safety and quality of the cabs and the training of drivers are vital factors, as are maintenance and the general standards observed.
I have found that most drivers are reliable and friendly, and my comments tonight are not meant as a criticism of the trade as a whole. I am thinking, rather, of the small proportion of drivers who get it a bad name by trying to exploit the six-mile limit and—I must add this in fairness—of the snail-like pace of the hon. Gentleman's Department in tackling what is known to be a matter of some controversy, taking the whole of this Parliamentary year so far to arrive at a conclusion.
I exonerate the hon. Gentleman himself from any criticism in this matter, because I know that he is personally very keen to solve it. I only wish that his right hon. and learned Friend the Home Secretary had pressed on with it more strongly some months ago. I say much the same about the representatives of the cab drivers and owners who have been to the Home Office on several occasions and tried to reach agreement on the sort of change which is needed. I hope that, perhaps, as a result of this Adjournment debate, they may soon bring their deliberations to a conclusion.
During the course of this parliamentary year, I have asked a series of Questions on the matter, and each time I have received what is known in ministerial jargon as a holding reply. The last one—the hon. Gentleman must be sick of having these Questions tabled to him—came on Thursday, 9th July, when, in a Written Answer, the hon. Gentleman said:
Discussions are continuing with the cab trade on a suitable fares structure, but I cannot say when it will be possible for legislation to be introduced.


In a further Answer to my hon. Friend the Member for Bournemouth, West (Sir J. Eden) on the same day, he said:
The object … is to arrive at a suitable basis for the statutory control of fares for all journeys within the Metropolitan Police District."—[OFFICIAL REPORT, 8th July, 1965; Vol. 716, c. 284.]
Perhaps I ought to declare a minor interest in this matter. I have a small financial connection with a company which is indirectly concerned with the taxicab trade; but this matter is a long way removed from that, and my interest stems from entirely different motives. I have raised this question in the past and, no doubt, I shall have to raise it again because, like all members of the public, I use taxicabs from time to time, and many of my constituents are seriously affected by the problem.
From the inquiries I have made, I have formed the opinion that there is a general desire on the part of the public for the limit to be extended, and I am sure that many cab owners and drivers take the same view. I have made a point of conducting my own public opinion poll among all taxi drivers I have encountered, and, so far, I have found a distinct majority in favour of change, albeit that they cannot entirely agree on what they want.
The most significant aspect of the necessary change would affect conditions at London Airport. It would stop the squalid exploitation which goes on of a number of passengers arriving at the airport, particularly foreigners coming here for the first time. A small number of unscrupulous drivers get this country a bad name by haggling with strangers—sometimes people who can barely speak English—when they arrive. To use a colloquialism, they really "take them for a ride". I have heard of very unpleasant scenes when drivers arriving with their passengers in the centre of London have demanded £5 or even as much as £10 and have got it because people pay up to save embarrassment.
I conducted an experiment today. I chartered a taxi outside the Palace of Westminster, and I was told by the driver that he wanted £2 10s. to take me to London Airport. I thought that this was rather steep, and asked if he could reduce it. He said that he could not because

he would have to make the return journey back from London Airport without a fare, although I reminded him that, once he came within the six-mile limit, round about Hammersmith, he would have a very good opportunity of picking up another fare. However, we agreed, and I went out to London Airport.
I met a number of taxi drivers there who were lining up waiting for passengers. I think that one or two of them were a little hostile when they recognised me and realised what I was about, but, on the whole, a large number did agree with me that there was a problem which needed to be settled. I was appalled to find that there were large numbers of pirate taxi drivers, not drivers licensed by the hon. Gentleman's Department or by the Metropolitan Police, but those who clearly take their cars there and tout around for custom in the exit halls. I am told that there are as many as 100 incidents a day of people who are being taken away, I should have thought illegally, and charged the earth for their journey. I blame the airport authorities for this; it could have been stamped out.
My hon. Friend the Member for Cardiff, North (Mr. Box), a neighbour of the Joint Under-Secretary, told me only this evening of a woman friend of his family who arrived at London Airport only three weeks ago, got into a taxi with her luggage and was told by the driver that the cost would be £3 10s. When she said that she thought that it was extortionate, she was told by the driver that she could take it or leave it. She thereupon took out her cases and carried them over to the airport bus, to the jeers of some of the assembled taxi drivers. Again, this is an extraordinary business and is something which should be stopped. I believe that my hon. Friend wrote to the Minister of Aviation about this incident.
I know that the Joint Under-Secretary is not responsible for what goes on at London Airport, but I urge him to have consultations with his right hon. and learned Friend the Home Secretary to see whether a new system could be devised. Many of these cabs which ply for hire at London Airport are licensed by the Metropolitan Police. I have also had complaints, not merely concerning London Airport, but from constituents of mine in Chiswick who, for some reason


or other, have had to take a taxi from one of the London termini to Chiswick, which is not all that far, and have faced bills of between 30s. and £2 as a result.
My solution to the problem—I realise that it may not be acceptable to the Home Office—is that the meter limit should be extended to 12 miles and that anything after that distance should be charged at double fare. I know that London Airport is more than 12 miles from the centre of London, but this is a special case and there could be an agreed tariff which could be prominently displayed at the airport and which could be the subject of airport police enforcement. Perhaps even a special licence to ply for hire at the airport could be introduced, the licence coming from the hon. Gentleman's Department.
It has been suggested in some quarters that under new regulations which might be introduced double fare might be charged after six miles. At least, this would be an improvement on the present situation, but I still consider that a limit of six miles is unrealistic in this day and age. Drivers to whom I have spoken about this tell me that they should not be under any obligation to undertake fares over six miles. They may well have a good case on this, particularly sometimes when they are on return journeys going home.
I should have thought that, once the regulations are changed—and I hope very much that in due course they will be—action could be taken against any man who refused a fare and was then caught trying to extract money from any person, saying, "I cannot do it for the set rate. If you pay me a little extra, I might be able to think about it", so that these people would be severely penalised.
From studying the facts, I am left with the view that the Home Office really must act quickly, because this matter has dragged on for a long time. It is in the public interest that the meter limit should be changed. It is in the genuine interest of the owners and the drivers of cabs. It is certainly time that this un-savoury Eastern market-type trading which goes on at London Airport and other public places was ended once and for all.
I am told by my hon. Friends who have done a lot of travelling on the Continent

of Europe that this practice certainly does not happen at continental airports. It certainly should not happen here. I hope that the Joint Under-Secretary will quickly take action.

11.3 p.m.

The Joint Under-Secretary of State for the Home Department (Mr. George Thomas): I congratulate the hon. Member for Brentford and Chiswick (Mr. Dudley Smith) on the pertinacity that he has shown concerning this question. He has been a campaigner ever since I have held this office, and I know that he was before. He is, of course, quite right to remind us that the question of the taxicab service in the great metropolitan city in which we find ourselves is a matter of public concern.
Before dealing with the points that the hon. Member has raised, I hope that he will not mind if I reject his charge that we have moved at a snail-like pace. This problem did not begin in October last. It was part of the legacy which we inherited on taking office and about which we have talked so much during recent days. That is the lighter side, but it is a problem. Until last autumn, it was an intractable problem. It was quite impossible to get the trade, which is an involved one with drivers, journeymen-drivers and owners all having their separate interests, together to discuss the problems which worry us all.
I want to say at once that I share the indignation of the hon. Gentleman at that minority of taxicab drivers who hold the public to ransom whenever it gets the chance. I was horrified at the story which the hon. Gentleman told us had been recounted to him by my own Member of Parliament, the hon. Member for Cardiff, North (Mr. Box), of the lady who was jeered at by other taxi drivers when she went to the bus. Making people feel small if they do not agree to pay the extortionate charges which some taxi drivers demand is something that the rest of the trade, as the hon. Gentleman rightly said, finds reprehensible. The majority of drivers know that it is damaging to them.
The law at present is that a taxi driver must accept a hiring for any journey within the Metropolitan Police District and the City of London of up to six miles or one hour in duration. That obligation applies whether the driver is standing or


plying for hire. The High Court ruled in 1947 that a fare scale prescribed by the Secretary of State by Statutory Instrument applied only to journeys of up to six miles, so that, under the present law, a taxi driver is entirely within his rights to demand what he likes for any journey over six miles, if he undertakes to do it.
The driver can refuse to go beyond the six miles, but if he agrees to do it; it is a matter for what is euphemistically called an arrangement between the passenger and the taxi driver. A notice to that effect is displayed in the passenger compartment of all our taxis. It is fair to say that there has been growing public opinion against the six-mile limit, which is now regarded as thoroughly unsatisfactory. It is true, also, that it dates back to the days of the horse-drawn cab.
Instances have been given to us tonight by the hon. Gentleman of fares of up to £10 being asked for journeys to or from London Airport. I want to link myself with the criticisms which the hon. Gentleman has made about those abuses. The tourist industry and the airways companies have been urging a change in the law in order that the position should be rectified. The recent strike at B.E.A. which paralysed normal forms of transport presented an opportunity for exploitation when a monopoly position was created. It is intolerable that the British public and foreigners visiting our country should be held to ransom. It is a disgraceful situation which makes a speedy solution urgently necessary.
We have not been dragging our feet. Since last year confidential discussions have been entered into with the trade. As they are confidential I know that the House would not expect me to reveal in detail the views of the several constituent parts of the taxicab trade, but I can tell the House that we have now reached the stage where all sides of the trade recognise that the six-mile limit of controlled fares is unsatisfactory in modern conditions, and are anxious that the good name of the trade should not continue to suffer through practices indulged in by a minority.
The Home Office believes that it is desirable to introduce control over the fares for all journeys of whatever length within the Metropolitan Police District, and I believe that I am right in saying

that the trade now also accepts this in principle. But it is one thing to accept it in principle. It is another thing to get agreement on details.
I mentioned that there are a number of organisations within the trade, each with its own legitimate interests, and we believe that it would not be fair to the trade to regulate the fares for journeys of any length within the Metropolitan Police District on the basis of the present tariff which applies only for the shorter journeys, namely, those of up to six miles, or one hour in duration.
We have to remember that the further from the centre of London the taxi driver goes, the less likely he is—as the hon. Gentleman's taxi driver told him today—of getting a return fare back into the area where most of the demand for taxis exists. To enable the trade to provide a service for the longer distance hiring without financial loss or resultant impairment of the standard of service, as a first step we must devise a suitable fare structure under which a somewhat higher tariff would apply for the longer journeys.

Mr. Dudley Smith: Will that mean a slightly higher tariff within the present six-mile limit?

Mr. Thomas: No. It would be for the longer journeys. I do not know what amendments will need to be made to the tariff which exists for the six-miles, but it is not part of the case for dealing with the problem of the longer journeys.
I am pleased to tell the House that we believe that a solution is not far off. I feel, in particular, that the drivers' representatives realise that a solution could only encourage public confidence in the trade; a confidence which, in its turn, would have a beneficial effect on their business, but one of our major difficulties is that all London cabs are required to be fitted with taximeters so constructed as to be capable of recording the prescribed fare for journeys up to six miles, and, clearly, it is desirable that any revised tariff that may be authorised in the future for longer journeys should also automatically be recorded on the meter.
It is important for the relationship between the passenger and the driver that they should both have recorded for them what the charge should be, but the meters available at present are capable of recording reliably only two tariffs, the basic


one, and another exactly double the first, and this higher tariff would come into operation at a pre-determined point, calculated by time and distance combined for any journey.
It is not possible to record a more sophisticated graduated tariff, rising in stages throughout the journey. This could be achieved only by a completely new meter whose development would take a good deal of time, be costly, and perhaps quite uneconomical. I am sure that the hon. Gentleman and the House will recognise at once the implications of this for the preparation of a new scheme of taxi fares. We have to decide on a tariff which is fair both to the public and to the trade. It must also be capable of being accurately and automatically recorded on the taximeter; but, in so doing, our choice is virtually limited to the point of distance at which to introduce a tariff double the basic one.
The hon. Gentleman suggests 12 miles instead of six, but that is not a suggestion we can readily accept; and I will try to explain why. It would result in a considerable reduction in drivers' incomes. The journey to London Airport would then be well below the recommended rates which, I think, are £2 10s. or £2 15s. and it would be very hard to justify such a drastic step. These factors are not easy to reconcile, but we believe that it can be done, and done in the reasonably near future—that is, in a matter of months.
If fares for all journeys were prescribed by law at a level which would enable the driver to have a fair return, it might be unnecessary to vary the present compulsory distances. An extension to 16 miles, which, I understand, is the distance between Central London and London

Airport, could be justified only if the most exceptional circumstances were present, but I hope—although I can put it no higher—that a suitable scheme can be devised in the next few months. It will not be for lack of effort on our part if it is not. Present arrangements are under an Act of Parliament, and fresh legislation would be needed to alter them, and the trade is in no doubt about our determination to bring to an end the present system whereby people, and particularly strangers, are being put in an embarrassing position and often exploited by overcharging.
The hon. Gentleman referred to certain practices at London Airport which, I am pleased to say, come under the jurisdiction of my right hon. Friend the Minister of Aviation rather than that of the Home Office. I know that my right hon. Friend the Minister is concerned about the question of the pirate taxicabs, which are a matter for him. I can go no further at present than to say that he is tackling this problem. This is not merely a question of regulations. It is a matter which would have to result in legislation, but I assure the hon. Gentleman that his determination to see a change in the present taxicab rules in London is shared by the Government. We must, however, reach this change by agreement or, at least, we hope to reach it by agreement.
It certainly looks now as if we shall soon be in a position in which the drivers, the journeyman drivers, the owners and the Government are all agreed on steps which will remove what is an unpleasant blot upon a public service, which, as the hon. Gentleman says, has served our people so well.

Question put and agreed to.

Adjourned accordingly at twenty minutes past Eleven o'clock.